"Rulers and Ruled in the US Empire"
By Stephen Lendman
10/12/07 "ICH"
-- - -James Petras is Binghamton University, New
York Professor Emeritus of Sociology whose credentials
and achievements are long and impressive. He's a noted
academic figure on the left, a well-respected Latin
American expert, and a longtime chronicler of the
region's popular struggles as well as being an advisor
to the landless workers (MST) in Brazil and unemployed
workers in Argentina. Petras is also a prolific author.
He's written hundreds of articles and 63 books (and
counting), published in 29 languages, including his
latest one and subject of this review - "Rulers and
Ruled in the US Empire."
The book is information rich on a core issue of our
time. It discusses the US empire's "systemic
dimensions," evolving changes in its ruling class, its
corporatist system, myths about its coming collapse,
contradictions in the current debate on immigration and
market liberalization policies, the use of force and
genocidal carnage, corruption as a market penetrating
tool, the Israeli Lobby's power and influence, Latin
American relations and events in the region, social and
armed resistance, and much more in four power-packed
parts under 17 subject chapter headings.
It's all covered below giving readers a detailed
sampling of Petras' thoroughly documented, powerful and
insightful account of his subject - who rules America,
who's ruled, the US imperial role in the world economy
and politics, and challenges to it in China, Latin
America and the Middle East. This is another must-read
book by a distinguished intellect and major figure on
the left who writes dozens of them. This is his latest.
Part I: The US Empire As A System
Petras distinguishes between who sets policies and rules
America and whose interests are served. He defines the
ruling class as "people in key positions in financial,
corporate and other business institutions" with rules
"established, modified and adjusted" as the composition
and "shifts in power" within the ruling class change
over time. One example is manufacuring's decline (from
outsourcing to low cost countries) as a
"multidimensional financial sector" (finance capital)
rose in prominence with Wall Street's influence
especially dominant.
Petras defines "finance capital" to include investment
banks, pension funds, hedge funds, saving and loan
banks, investment funds and many other "operative
managers" of a multi-trillion dollar economy they've all
benefitted hugely from. They've been the driving force
powering real estate and financial markets speculation,
agribusiness, commodity production and manufacturing.
Petras calls "finance capital" the "midwife" of wealth
and capital as well as a "direct owner of the means of
production and distribution."
He stratifies it into three sub-groups from top to
bottom in importance: big private equity bankers and
hedge fund managers, Wall street executives, and senior
officials of private and Wall Street public equity funds
as well as major figures in top law and accounting
firms. Political leaders are drawn from their ranks with
Wall Street in the lead and one firm in particular
standing out - Goldman Sachs. Today, its former CEO
Henry Paulson is the de facto US economic czar in charge
of proving doomsayers wrong about the US economy with
Federal Reserve Chairman Ben Bernanke's money creation
power partnered with him. Both of them must also
navigate around the powerful Israeli Lobby and its
pro-war agenda that could lead to catastrophic
consequences if the US and/or Israel attack Iran and the
Middle East explodes and disrupts oil flows.
Petras sees an inevitable split between wealth-first
financial ruling class objectives and militarists in the
Bush administration, their counterparts in Israel, and
the Lobby representing Israeli interests with a
stranglehold on most of Congress. The battle lines shape
up over Israeli Middle East dominance at the cost of
imperial overreach, an escalating trade deficit, a
ballooning national debt, decreasing capital inflows to
offset it, and a declining dollar as other nations move
to euros, yen and pounds sterling. Something has to
give, says Petras, as both sides support opposing
agendas that only a crisis-provoking widespread backlash
may resolve.
For now, however, things couldn't be better for the
ruling class (despite their disrupted plans in Iraq and
Afghanistan) with the top 2% of adults in the world
owning half its wealth, the top 10% with 85% of it, and
the bottom half with just 1%. The result is an
unprecedented wealth disparity with corporate CEO's on
average earning over 400 times the median income of wage
and salaried workers, and for top-earning speculators
and hedge fund managers the ratio is 1000 to one with
some having incomes topping a billion dollars a year. In
addition, corporate wealth was at a record 43% of 2005
national income accruing to profits, rents and other
non-wage/salary sources compared to a declining
percentage of it to individuals, except for those at the
top gaining hugely.
Petras states: "The growth of monstrous and rigid class
inequalities reflects the narrow social base of an
economy dominated by finance capital" with the US
redistributing far less to its people than other
developed nations like those in Western Europe.
Democrats are as culpable as Republicans with both
parties tied to big monied interests through campaign
funding and the power of lobbies. It makes everyone in
the political power structure unwilling to change things
so they don't. The result is working Americans suffer
hugely while those at the top never had it so good. It
signals warnings of a potential worker backlash ahead
that for now have gone unheeded. Elitists ignore it at
their peril, so far without negative consequences to
their dominance, but watch out.
Capitalism or US Workers in Crisis?
Petras notes how for years many on the left and some in
the financial community have been predicting the "coming
collapse, decline or demise of capitalism" as though
(for some) wishing would make it so. They're still
predicting, but it hasn't happened, and Petras explains
why not. It's because business and government partnered
(especially since the 1980s) to let workers take the
pain so business could gain and prosper. It's done it
hugely and continues to despite the resurgent summer
doomsday predictions still ongoing.
In a letter to clients, noted investment manager Jeremy
Grantham explained why business is resilient by
comparing the global financial system (with its US
anchor) to a giant suspension bridge. Thousands of bolts
hold it together, so when some of them fail, even a lot
of them, it's not enough to bring it down. Short of
"broad-based....financial metal fatigue," even more
bolts may fail, but he's betting the bridge will hold,
supported by amazing "animal spirits," at least for now.
Grantham is likely right in the near term, while Petras
takes a longer view, and his arguments are compelling.
He sees labor today in crisis with living standards
declining the result of reduced or eliminated business
benefits, government services and stagnating wages. He
also lists popular myths predicting doom ahead - the
growing budget and current account deficits; ballooning
national debt; excess speculation; weakening dollar;
high energy costs; outsourcing of jobs at all levels,
and more. Petras maintains these problems aren't as
serious as claimed because:
-- budget deficits declined in 2006 as tax revenues rose
from high-end earners' greater income at the expense of
labor getting less;
-- foreign investment in the US remains high;
-- the dollar remains the world's reserve currency; over
time, it weakens and strengthens based on interest
rates, political events, and the overall level of
economic activity; nonetheless, the dollar weakened
considerably after the Fed cut interest rates and
depreciated to an all-time low against a basket of six
of its major peer currencies that include the euro,
pound and yen; in addition, the New York Board of Trade
index hit its weakest level since it came out in 1973,
and the same is true for the Fed's trade-weighted dollar
index since its creation in 1971; what's ahead? Likely
more of the same until everyone believes the dollar is
dead; then, watch out;
-- a decade-long trade deficit hasn't caused apocalypse;
-- strong economic underpinnings (Grantham's giant
suspension bridge) offset excess speculation, and
workers, not capital, take the pain;
-- high energy profits overseas are recycled back into
dollar-based investments and have been for years
although countries like Iran, Venezuela and others are
moving away from the dollar at least for now;
-- the potential of new technologies is underestimated;
-- corporate profits have had their longest ever run of
double-digit gains; the number of millionaires and
billionaires is growing; the rich are becoming
super-rich; and the beneficiaries are largely in North
America, Western Europe (plus Russia) and Asia.
Petras concludes that as long as worker exploitation
continues, the fundamental law of "casino capitalism"
applies - the house never loses, or in this case the
neighborhood (of developed nations) with some in it
doing better than others and the US their anchor. The
weakness of US labor and its history of overpaid,
underperforming, corrupted leaders explains why with
only 7.4% today in the private sector organized compared
to 34.7% in the 1950s. Unless new social and political
movements surface under activist leaders, Marx's "dirty
secret" and Adam Smith's "vile maxim of the masters of
mankind" will continue proving "the wealth of all
nations" depends on the rich taking it "all for
ourselves and (leaving) nothing for" the working class.
Market Liberalization and Forced Emigration
Migration and so-called illegal immigrants make
headlines but never the reasons why that are two-fold:
fleeing political strife (as in Iraq) or for economic
reasons that the imperial globalized market system
causes horrifically. The latter forces millions of
Mexicans el norte because of NAFTA. Its disastrous
effects on their lives leaves them no choice - emigrate
or perish.
Petras explains when protective trade barriers come
down, millions of small farmers and entrepreneurs are no
match for the power of subsidized agribusiness, big
manufacturers and corporate service providers. They're
displaced when their livelihoods are lost, and that
creates a huge surplus army of labor on the move and an
opportunity for business to exploit for profit. It
affects all skill types and levels (farm workers to
computer specialists to doctors), undermines unions, and
allows management to replace higher-paid US workers with
low-wage immigrants at their mercy and getting little.
Pay is kept low, benefits few or none, working
conditions unsafe, unions weakened, and dare complain
and be sent home.
Petras notes that as imperial power grows, "the massive
movement of dislocated workers toward the imperial
center multiplies," and there's no end in sight nor will
there be as long as highly exploitative sectors like
agriculture, construction and low-end manufacturing and
services thrive on it. Workers lose and so do "sender"
countries. They bore the costs of raising, educating,
training and providing services for millions with
"receiver" nations getting the benefits. It amounts to
multi-billions in the form of critically needed skilled
areas lost that include professionals like doctors,
nurses, teachers and others. This won't ever change
unless worker movements unite against it.
Empire-Building and Corruption
Petras notes how empire-building "is the driving force
of the US economy (especially post-9/11)," corruption a
key corporate predator tool to re-divide the world, and
nations with the greatest firepower get the choicest
slices. Business profit growth depends on exploiting
overseas opportunities for their resources, markets and
cheap reserve armies of labor with four so-called "BRIC"
countries especially targeted:
-- China for its cheap labor and opportunities in
finance, insurance and real estate;
-- India for its low cost information technology
services;
-- Brazil for its high interest rates that hit 19.5%,
were then greatly cut, but are still around 11%; and
-- Russia for its high profit oil and gas reserves,
transport and luxury goods markets with booming
opportunities in real estate once political leaders are
bought off in a country rife with corruption as is
China.
Petras notes that today over half the top 500
transnational corporations earn most of their profits
overseas, and for many it's 75% of it. This trend will
continue, he says, as these companies shift most of
their operations abroad for greater cost savings. In
addition, "political corruption, not economic
efficiency, is the driving force of economic
empire-building (with) the scale and scope of Western
pillage of the East....unprecedented in recent world
history." It's from business-friendly legislation on low
wages, pensions, job tenure, land use, worker safety and
health, all designed for maximum profit. Political
leaders are bought off to get state-owned businesses
privatized, markets deregulated, wages kept low, with a
huge reserve army of exploitable labor the payoff for
"the US Imperial System."
Hierarchy of Empire and Use of Force
Petras explains the US imperial system in terms of its
"hierarchy of empire" rankings. Imperial powers top it
(the US, EU and Japan) followed by emerging powers
(China, Russia, India), semi-autonomous client regimes
(Brazil, South Korea, South Africa), and collaborator
regimes on the bottom (Egypt, Mexico, Colombia). Then
come independent "revolutionary" (social democratic)
states like Venezuela and nationalist ones like Iran as
well as "contested terrain and regimes in transition
(Iraq, Afghanistan, Somalia, Palestine)." Client regimes
provide "a crucial link in sustaining imperial powers"
by allowing them to project and extend their state and
market reach.
One "anomaly" in the hierarchy is Israel. It's a
colonialist and nuclear power and world's fourth largest
military power and arms exporter that's breathtaking for
a country of 7.1 million and 5.4 million Jews. It's
influence over US Middle East policy, however,
inordinately outweighs its size with Iraq exhibit A and
Iran moving up fast. More on this below.
Petras notes the constant flux within the imperial
system the result of wars, national struggles and
economic crises. They bring down regimes and elevate
others with examples like Russia, the Eastern European
states, South Africa and Venezuela. It shows "no
singular omnipotent imperial state....unilaterally
defines the international or....imperial system (that in
the case of the US) proved incapable of....defeating
popular....resistance in Iraq and Afghanistan."
Even in Somalia, a US proxy war is in trouble, but it's
too early to predict the outcome. The easy 2006
overthrow of the popular Islamic Courts Union (ICU) put
an unsupported warlord regime in charge (that plundered
the country from 1991 - 2005) with predictable results -
strong resistance against the US puppet regime and its
deeply corrupted Transitional Federal Government (TFG)
"president," Abdullahi Yusuf.
Washington backed a hated regime and an equally detested
Ethiopian government that's been "prop(ping) up its
Somali puppet" with a lift from US-supported force.
Earlier in 1993-94, the Clinton administration's
intervention failed. It spawned mass opposition, took
thousands of Somali lives in retaliation, and ended in
defeat and a humiliating US pullout. That may repeat
despite Washington's establishing an African Command (AFRICOM)
to solidify its hold on the continent and its
strategically important Horn. So far, it's very much up
for grabs with US presence in the region unwelcome and
greatly destabilizing. The "empire" never learns, so
it's on to the next target that looks like Iran. More on
that below.
Imperialism and Genocide
Petras explains how Korea, Vietnam and other wars hid
their true cost in lives, devastation and human
wreckage. It's the way of all empires sweeping over
populations like crabgrass. It becomes "an accelerating
predisposition to genocides to accomplish political
aims," and in an age of "shock and awe," it can come
with "awesome" speed. An example is from the latest
O.R.B. British polling data reporting 1.2 million Iraqi
deaths since March, 2003 alone plus another 1.5 million
up to that date. The true toll may be even higher with
huge uncounted numbers of daily violent and non-violent
deaths that one estimate by Gideon Polya places at 3.9
million from 1990 to the present. No one knows for sure,
and his estimate may be as good as any other. All of
them are horrific.
Petras notes the "quantity" of killings elsewhere - six
million Jews and 20 million Soviet civilians in WW II as
well as 10 million Chinese civilians in Asia. He
explains genocide as policy from a "state (promoted)
racialist-exterminationist ideology (as well as from) an
historical antipathy of one culture to another." This
allows ruling classes to legitimize their ideology and
achieve "uncontested dominance" and ability to
economically exploit domestic and overseas markets. An
omelet requires breaking eggs. Mass human slaughter is
the frequent fallout from consolidating empires with
living beings having no more worth than egg shells.
Genocides also result from revolutionary challenges to
unpopular puppet rulers with Korea, Indo-China and Iraq
Exhibits A, B, and C. Up to eight million perished in
Asia, and three (or maybe four) million could be reached
in Iraq in 2008 at the present pace. There's no end to
it in sight with billions funding it, and no reporting
on the carnage in the mainstream.
Petras reviews examples of imperialism becoming genocide
with the Reagan administration alone responsible for its
share. It committed multiple proxy genocides in Africa,
Afghanistan and Central America, but you'd never know it
from reports at the time about a president being prepped
for Mount Rushmore with a spot for George Bush beside
him until Iraq got him in trouble.
Another unreported genocide is Israel's six decade-long
crusade against the Palestinians with predicable
results. It caused many thousands of deaths, mass
population displacement, and excessive use of detentions
and torture to deny a people freedom and justice in
their own land. The policy continues because Israel has
a powerful ally in Washington and an even more
influential Lobby working on its behalf. More on that
below.
Petras notes genocides are "repeated, common practices,"
impunity for committing them the norm, and no effective
international order is in place to stop them. Victors
justice prevails so victims face kangaroo tribunals like
the ICTY for Yugoslavia and the equally corrupted one
for Iraq. Genocides will only end when imperial powers
are defeated and their leaders held to account for their
crimes, but that goal is nowhere in sight.
The Global Billionaire Ruling Class
The number of world billionaires reached 946 in March,
2007, they have an estimated combined wealth of $3.5
trillion, and over half of them are in three countries -
415 in the US, 55 in Germany and 53 in Russia where
never did so many people lose more so a handful of
others could gain so hugely in so short a time. India
ranks high as well with 36 billionaires with China next
in the region at 20. The number of millionaires exploded
as well with close to 10 million in 2007, and in 2006
their numbers grew by an estimated 8.3%.
Balzac was right saying behind every great fortune is a
crime (and most often a small fortune as seed money) but
likely nowhere more rapaciously than in Russia. Petras
notes "Without exception, the transfers of (state)
property were achieved through gangster tactics -
assassinations, massive theft, and seizure of state
resources, illicit stock manipulation and buyouts." They
strip mined over a trillion dollars of Russia's wealth
into private predatory hands who, in turn, stuffed them
in offshore accounts. It happens everywhere with the US
exhibit A. The Rockefellers, Morgans, Fords and
Carnegie's didn't amass wealth by being neighborly or
nice. They got it the old-fashioned way - by
strong-arming and stealing.
In developing countries, it came faster under Washington
Consensus rules favoring capital over people with
billionaires coming out on top. Latin America has 38 of
them, mostly in Brazil (with 30) and Mexico (with
industrialist Carlos Slim Helu now the world's third
richest man). These "two countries.... privatized the
most lucrative, efficient and largest public
monopolies," and benefitted hugely from regressive
taxes, tax exemptions, deregulation, big subsidies, and
the ability to hike prices and make vital services
unaffordable to millions who can't pay for them.
"How to become a billionaire," Petras asked. No need for
an MBA or market savvy when the "interface of politics
(aka friends in high places) and economics" works much
better. The road to super-riches came from privatized
state assets that began with bloody military coups in
Latin America. In countries like Chile, Colombia and
Argentina, results were always the same - great riches
at the top, stagnant economies, vast poverty, high
unemployment, two-thirds of the region's population with
"inadequate living standards," and the long shadow of US
involvement backing military dictators, business elites,
and neoliberal politicians to assure lucrative ties to
corporate interests in America. More on this below.
Part II - The Power of Israel and Its Lobby in the US
Petras covered how the Israeli Lobby defeated the Jim
Baker Iraq Study Group's (ISG) proposal released
December 6, 2006. Its alternative US Middle East agenda
lost out to the Israeli Lobby's influence on Congress, a
massive supportive propaganda campaign in the major
media, and Israeli Prime Minister Ehud Olmert being as
able to "have the US president under our control" as
Ariel Sharon once boasted.
For a time it looked like the ISG plan would prevail
with top Bush advisors recommending dialogue with Iran;
high-ranking military, active and retired, wanting a
phased withdrawal for a failed effort; and the Army,
Navy and Marine Corps weekly publications wanting
Defense Secretary Rumsfeld sacked shortly before he
resigned. Even Big Oil interests backed Baker because
stable conditions favor business more than conflict (at
least to pump oil), and that won't happen without a
change of course now off the table.
Iran wants rapprochement as well but not on the usual US
terms - making demands and offering nothing in return.
Iran's objectives are simple and reasonable - normalized
relations and an end to Washington's confrontational
stance and military threats. They're off the table
because the "Israel-First power structure
(Lobby-Congress-Mass Media-Democratic Party Donors)"
reject them. Syria is just as compliant, but its
overtures are also rebuffed for the same reason.
Petras explained that AIPAC wants war with Iran as its
top priority objective. In addition, the publications,
conferences and press releases of the Conference of
Presidents of the Major American Jewish Organizations (CPMAJO)
asked their members "to go all-out to fund and back
candidates (mostly Democrats) who supported Israel's
military solution to Iran's nuclear enrichment program"
even though IAEA agrees it's in total compliance with
Nuclear Non-Proliferation Treaty rules while Israel
violates them with impunity.
In the end, Prime Minister Olmert co-opted George Bush,
got him to reject the ISG proposal and ally with
Israel's aim to solidify its Middle East dominance by
removing a non-existent Iranian threat with Syria also
targeted. In many respects, this flies in the face of
logic as many influential US figures know. Petras
believes Iran is a key interlocutor for a Middle East
settlement that might let Washington retain its
strategic Arab allies. Tehran is willing to cooperate
but not when its government is lumped with Al-Queda, the
Taliban and Iraqi resistance and is being threatened
with war. That's the current condition with renewed Bush
administration efforts to prep the public to accept more
of it if it comes.
Hamas also has been conciliatory. Its leaders made two
peace proposals as a show of good faith, is willing to
recognize Israel if Palestinians get justice, pledged a
cease-fire in the face of Israeli attacks, and was
rebuffed with rejection and an Israeli blockade of Gaza
along with frequent hostile incursions. Conflicts rage
in Iraq and occupied Palestine, more war threatens in
Iran, and the road to peace in the region runs through
Jerusalem providing Washington concurs. But it's not
possible, in Petras' judgment, unless foreign military
bases are closed, there's public control or
nationalization of the region's resources, and Israel
ends its colonial occupation of Palestine. So far, those
objectives are nowhere in sight.
The Lobby and Media on Lebanon
In Petras' powerful 2006 book, "The Power of Israel in
the United States," he documented how this power derives
from a vast pro-Israel Lobby in the country supporting
all aspects of its agenda. It's position is firm -
"Israel is always right, Arabs and Muslims are a threat
to peace," and the US should unconditionally support
Israel across the board. In Petras' view, that's the
main reason why the Bush administration attacked Iraq
and may now target Iran and Syria. Israel perceives
these countries as threats, Washington seems willing to
remove them, and a chorus of media-driven propaganda
approves.
They always support Israel and jumped right in last
summer backing "Operation Change of Direction" against
Hezbollah and "Operation Summer Rain" against Hamas that
caused many hundreds of deaths and mass destruction. It
was all papered over in the major media and
characterized as Israel's "defensive, existential war
for survival against Islamic terrorists." It was pure
baloney. In fact, and unreported, Israel launched dual
long-planned aggressive wars with Hezbollah's capture of
three IDF soldiers in Lebanon the pretext and Hamas
taking one Israeli corporal the justification in
occupied Palestine. Never mentioned are the many
thousands of Palestinians illegally abducted, imprisoned
and tortured, and that unprovoked aggressive wars and
their fallout are war crimes and crimes against
humanity.
Also unmentioned is that if Hezbollah and Hamas hadn't
provided the pretexts, Israel (as it's often done) would
have manufactured them to launch its summer aggression.
With full US support and backing from its Lobby and
dominant media, these type actions continue at the
expense of their victims with US taxpayers duped into
funding them generously.
US Empire and the Middle East
Petras notes key factors help explain US Middle East
policy that in his judgment are "challenged from within
and without, are subject to sharp contradictions," and
are likely to fail.
First, is the influence of the Israeli Lobby he
documented powerfully as have Mearsheimer and Walt in
their work. It's likely the most potent lobby in
Washington and can practically mobilize the entire
Congress, every administration and the dominant media to
back pro-Israeli policies even when they run counter to
US corporate interests that in Middle East means those
of Big Oil primarily.
The Lobby wanted war with Iraq and got it. Now its top
priority is stiff sanctions and war on Iran, and if the
orchestrated media hate frenzy targeting President
Mahmoud Ahmadinejad's Columbia University address
September 24 is an indication, it may get it. As Petras
notes, the Lobby's fanatical support for Israel is so
extreme and uncompromising, it's even willing to risk
world war and economic collapse to get its way.
Another key factor is the US ability to enlist and co-op
client states and proxy forces to serve our interests -
the Kurds in Northern Iraq; the Abbas-Dahlan Fatah
militants in Palestine; the Sinoria-Hariri-Jumblat
pro-US/Israel, anti-Syria/Hezbollah/Hamas alliance in
Lebanon; Mubarak in Egypt; King Hussein in Jordan;
pro-US regimes in Turkey; the Saudis and others.
Petras then explains how the Israeli Lobby's influence
runs counter to the US "Arab agenda." It shows up in
Washington's failure to construct a NATO-style
power-sharing alliance in the region, except for Turkey
and Israel, and the former may not prove solid. The Iraq
policy has been disastrous, each tactic tried failed,
resistance is unabated, the Arab street overwhelmingly
rejects occupation, and Arab leaders offer tepid
support.
Petras calls Washington's permanent war strategy (next
targeting Iran and Syria) "an irrational gamble
comparable to Hitler's attack on Russia" that doomed
him. Today in the Middle East, attacking these two
countries may only compound the Iraq failure with
"greater defeats, greater domestic rebellion" and still
more wars without end promising gloomy prospects ahead.
Part III - The Possibility of Resistance
Petras discusses China and the "general consensus (it's)
emerging as the next economic superpower" to challenge
US dominance. Petras expresses doubts that can only be
summarized briefly. He notes Chinese capitalism not only
depends on growth and the ability to generate jobs, but
also on "the social relations of production, circulation
and reproduction." They come at a high price - ferocious
labor exploitation, rampant corruption and nepotism,
mass small farmer displacement, firing millions of
workers from state-owned and bankrupt enterprises,
ending social services, and higher living costs
increasing class warfare in the streets against
billionaire kleptocrats and foreign investors profiting
hugely at the expense of most Chinese.
Petras then distinguishes between "made in China" and
Chinese-owned and whether the former enhances China's
growth or foreign investor profits instead. He sees
China taking on "features of both a neo-colony and an
emerging imperial power," but mostly the former. He
notes the standard of living for most Chinese "declined
precipitously;" air, water and ground pollution greatly
increased; the quality of life for most Chinese suffers;
class inequalities are vast; and gains from a
consumerist society for a minority of the population are
offset by dirty air, loss of leisure, job security, near
rent-free housing, state-provided health care and
education, deteriorated working conditions and more.
Paradise it's not, at least for workers, and conditions
aren't improving.
Petras then discusses China's transition from state to
"liberal" capitalism. As it deepened, trade barriers
were dismantled; protective labor laws abolished; price
controls lifted; the countryside ravaged; a massive new
army of unemployed workers created; and an export-driven
market strategy followed. The result today is a new
class of billionaires and about 2900 former party "princelings"
who control around $260 billion of wealth. In addition,
property, real estate and construction boomed, an export
strategy concentrated development on coastal regions,
and domestic consumption is relatively constrained.
In contrast, "millions of construction workers, miners,
domestic servants and assembly-line workers (labor)
under the most abominable conditions" - long hours, low
pay, awful sanitary conditions and little regard for
safety in an unregulated environment structured for
maximum profit. China today is a "magnet for capitalists
and investors worldwide," a free market paradise that's
hell on workers paying hugely for the country's
marketplace "success."
Petras envisions China's capitalism deepening and mainly
benefitting foreign investors. He sees their "initial
beachheads as minority shareholders" extending into
production, distribution, transport, real estate,
telecommunications, consumer goods and services,
entertainment, finance and more and eventually gaining
more control. As a result, he believes China's next
great leap forward will be from liberalism to
neoliberalism, the country will lose its national
identity, it will become a "territorial outpost" for
foreign-owned transnationals, and the country's bid for
world power status will be subverted.
Petras sees 21st century China emerging as a "gigantic
proxy for imperial powers," but China won't be one of
them. Its "Great Leap Backwards" will be consummated
when the nation's "share of profits shifts from the
national bourgeoisie" to foreign investors in a process
now accelerating.
But it won't come easily as a new generation of China's
leaders may stop or curtail it. In addition, growing
mass resistance has now emerged for obvious reasons
cited above. Already, close to 100,000 mass
demonstrations have occurred involving millions of
Chinese protesting a workers' hell. Social crisis is
deepening, class struggle has returned, and the
government has taken note. It's beginning to address
concerns but giving back pathetically little considering
China's massive population. Petras calls these
remediating actions "too little and too late." Ahead he
sees decentralized protests becoming organized urban
worker movements that when joined with displaced farmers
may set off a new rebellious period. This may then
blossom into "a new revolutionary struggle" that will
determine China's future and its climate for investors.
The US and Latin America
Petras has studied Latin America for decades and knows
the region as well as anyone. Here he dispels notions of
a revitalized regional populism with US dominance
waning. His case is compelling as he argues Washington's
influence has increased in recent years (though not to
the level of the 1990s) despite the success of Hugo
Chavez and his ability to thwart US efforts to unseat
him.
The Bush administration lost out on FTAA but has had
other successes:
-- bilateral trade agreements with numerous Latin
American states from the Caribbean to Chile;
-- an expanded number of military bases despite the
possible loss of one in Ecuador ahead;
-- US business interests in the region flourishing,
including in Venezuela where they're booming; and
-- neoliberal free market policies intact despite
campaign rhetoric promising change.
Aside from Venezuela and maybe Ecuador (where it's too
soon to tell), the left's appraisal of progressive
change is nowhere in sight, so what are they seeing
that's not there.
Petras assesses the current state of things in the
region after reviewing its recent history readers can
get from the book. He notes signs of Washington's
declining influence that's had no adverse affect on
corporate interests except in Venezuela where taxes are
now fair compared to earlier when they were too low. He
also explains so-called center-left regimes in Brazil,
Argentina, Bolivia, Uruguay and elsewhere tamed mass
social movement demands while embracing 1990s
neoliberalism. In Brazil, if fact, President Lula da
Silva actually deepened and extended the privatization
and restrictive budget policies of the preceding Cardoso
regime, and despite his Workers Party background,
demobilized mass movements and trade unions instead of
supporting them as people expected. Many now see him for
what he is - a traitor, but sadly, he's got company, too
much of it.
Of great significance is the way Petras explains four
competing regional power blocs representing varying
degrees of accommodation or opposition to US policies
and interests.
1. The Radical Left
It includes:
-- the FARC guerillas in Colombia (active since 1964);
some trade union sectors; and peasant and barrio
movements in Venezuela;
-- the labor confederation CONLUTAS and sectors of
Brazil's Rural Landless Movement (MST);
-- sectors of the Bolivian Labor Confederation (COB) and
the Andean peasant movements and barrio organizations in
El Alto;
-- peasant movement sectors (CONAIE) in Ecuador;
-- teachers and peasant-indigenous movements in Oaxaca,
Guerrero and Chiapas, Mexico;
-- nationalist-peasant-left sectors in Peru;
-- trade unionist and unemployed sectors in Argentina;
and
-- other Central and South American social movements and
some Marxist groups in several countries.
2. The Pragmatic Left
-- Hugo Chavez in Venezuela who combines grassroots
participatory democracy and redistributive social
policies with support for business interests;
-- Evo Morales in Bolivia;
-- Fidel Castro in Cuba;
-- various large electoral parties and major peasant and
trade unions in the region; leftist parties including
the PRD in Mexico, FMLN in El Salvador, CUT in Colombia,
Chilean Communist Party, Peru's nationalist
parliamentary party, sectors of Brazil's MST, Bolivia's
MAS governing party, CTA in Argentina, and PIT-CNT in
Uruguay.
3. The Pragmatic Neoliberals (the most numerous
political block)
-- Lula in Brazil;
-- Kirchner in Argentina;
-- the major trade union confederations in Brazil and
Argentina;
-- business and financial elite sectors providing
subsistence unemployment doles and food aid; and
-- similar groups in Ecuador, Nicaragua (the Sandinistas
and their split-offs), Paraguay and other countries.
4. The Doctrinaire Neoliberal Regimes
-- Calderon in Mexico;
-- Uribe in Colombia;
-- Bachelet in Chile (in spite of her being imprisoned
and tortured under Pinochet);
-- the Central American countries: El Salvador,
Honduras, Costa Rica and Guatemala;
-- Garcia in Peru;
-- Paraguay with the region's largest military base;
-- Uruguay's ex-leftist regime now rightist;
-- US-occupied Haiti through proxy thuggish paramilitary
UN peacekeepers; and
-- the Dominican Republic.
The notion that populism swept Latin America in the new
century is pure fantasy. In fact, there's a "quadrangle
of competing and conflicting" regional forces with
Washington having less market leverage than in the 1990s
"Golden Age of Pillage" but still enough to be dominant
and able to keep business flourishing.
Petras continues his analysis with detailed examples of
key center-left regimes in Brazil under Lula, Argentina
under Kirchner, Uruguay under Vazquez, Bolivia under
Morales plus some comments on Peru and Ecuador under
leaders preceding their current ones. Each case
substantiates the fantasy that these regimes represented
"new winds from the Left" sweeping the region. Hot air
maybe, but little, if anything, in the way of
progressive change despite the beliefs of many
intellectuals on the left.
However, that's not to say leftist forces aren't strong
enough to bubble up and bring change. Insurrectionary
forces brought Evo Morales to power in Bolivia and can
take him down if he fails them as he's now doing. The
same is true in other countries with Hugo Chavez their
model. He challenged US imperialism, brought real social
change, has mass public support and thus far withstood
US efforts to oust him. In Cuba, Fidel Castro thwarted
every Washington effort against him since 1959 and is
still in charge, larger than life, although frail and
weak following his protracted illness from which he's
still recovering. Petras sees a new generation of young
committed leaders emerging in the region. "They are the
'Left Winds' of Latin America," and it's in them that
hope lies.
Foreign Investment (FI) in Latin America
Petras demystifies FI's impact, explains the risks in
attracting it, and exposes six myths about its benefits.
Myth 1.
It's untrue FI creates new enterprises, market
opportunities and more. Most, in fact, aims to buy
privatized and other enterprises while crowding out
local capital and public initiative.
Myth 2.
FI doesn't increase export competitiveness. It buys
mineral resources for export with little done to create
jobs or stimulate the local economy.
Myth 3.
It's false to think FI provides tax revenue and hard
currency. An FI export model creates more indebtedness
and a net loss.
Myth 4.
It's false believing debt repayments to international
lenders is key to a good financial standing. Much
foreign debt is odious and repaying it harms borrower
countries.
Myth 5.
It's false believing FI provides developing countries
needed capital. It's used instead to buy local companies
and control a country's markets.
Myth 6.
It's false believing FI attracts further investment.
Capital freely moves to wherever it gets the best
returns and is anchored nowhere.
Developing countries benefit most by relying less on FI
and more on national ownership and investment. The
former is predatory. The latter accrues profits to the
national treasury and grows the country's economy. FI
demands conditions favoring capital over labor that
results in a widening economic gap and greater
inequalities in political and social power. The 20 year
(1980 - 2000) record of Latin American FI is socially
disastrous. Living standards plunged while unemployment
and poverty soared. Hardly reasons to attract it and
clear ones to stay away or restrict it.
Part IV - An Agenda for Militants
Petras considers FI economic alternatives and ways to
buck its strategic countermeasures. FI generally
threatens disinvestment when a country wants to enhance
its own economy and benefit popular living standards.
Hardball tactics cut both ways, and the state can use
its own effectively to counter capital flight threats as
well as adopt policies in advance serving its needs
first ahead of those FI wants to have things its own
way.
Petras notes that FI "is incompatible with any notion of
an independent, socially progressive country" even
though at times it can be useful in a regulated
environment controlling it. He explains a country's own
financial and economic resources can be used instead of
FI to enhance its internal development and technological
advance by reinvesting profits from export industries;
controlling foreign trade to increase retention of
foreign exchange; investing pension funds productively;
imposing a moratorium on debt payments; recovering
stolen public treasury funds and unpaid taxes;
maximizing under-employed labor, and more.
Most countries can avoid FI by relying on multiple
sources of its own capital. They can also employ
alternative effective strategies when outside help is
needed by minimizing its ownership, employing short-term
contracts on favorable terms, imposing stiff penalties
on capital flight, and barring it from returning if it
leaves. Petras concludes: "The historical and empirical
evidence demonstrates that the political, economic and
social drawbacks of (FI) far exceed any short-term
benefits perceived by its defenders."
The Middle Class and Social Movements in Latin America
Petras observes that middle class attitudes in the
region depend on the "political-economic context"
confronting it. It's attracted to the right under
expanding right-wing regimes and to the left in times of
economic crisis. On the other hand, under a "popular,
anti-dictatorial, anti-imperialist populist government,
the middle class supports democratic reforms" but not
radical policies harming it for the benefit of the
working class. Three examples make his case - in Brazil
under Lula when it took over his Workers Party; in
Argentina when it benefitted under Menem and Cardoso and
later under Kirchner; and in Bolivia under Morales who
combines "political demagogy" to his base and neoliberal
IMF austerity in his policies attractive to middle class
and business interests.
Petras notes social movements failed by not developing
political leadership or a program for state power and
depended instead on "electoral politicians of the
upwardly mobile professional middle class." The Left's
key challenge, he believes, is to "convert the public
sector middle class from anti-neoliberalism to
anti-capitalism and anti-imperialism, and to combine
urban welfare (with) agrarian reform."
Iraq and Afghanistan's Importance in Defeating the
Empire
Petras concludes by noting Washington's imperial wars
were stopped in their tracks in Iraq and Afghanistan by
resistance too powerful to contain. A "shock and awe"
blitzkrieg failed when Iraqis wanted a say in running,
rebuilding and transforming their country and rejected
its US-installed puppet regime. The country is a
wasteland, the nation creation project bankrupt, and the
prospect for success bad and worsening with
multi-billions expended and nothing gained except huge
profits for administration favored contractors that
always benefit whoever wins or loses.
The same situation holds in Afghanistan. An easy five
week walkover turned into an endless debacle with no end
in sight. Washington planned successive wars for
unchallengeable world dominance, but local resistance in
two countries stopped it cold (so far), may defeat its
proxies in Somalia, and resilient opposition in
Palestine and South Lebanon may prove equally formidable
as well.
The US is now over-extended and its "imperial grand
strategy" weakened. It's made preemptive wars against
Iran and Syria and trying again to topple Hugo Chavez
less likely, but none of these possibilities are off the
table. Cornered and facing defeat, rhetoric is heated
making anything possible, and the September 20
Lieberman-Kyl "Sense of the Senate" (no legal force)
resolution/amendment to the FY 2008 Defense
Authorization bill ratchets up the possibility of
attacking Iran and its regional "proxies" with
potentially catastrophic fallout the risk.
For now, emboldened resistance and strong anti-war
opposition are matched against an administration
desperate to turn things around and willing to try
anything to do it. How this may end is a crapshoot, the
stakes on its outcome too great to risk but may be waged
anyway, and the world trembles as it waits and watches.
Stay tuned and hope Petras is right believing Iraq and
Afghanistan thwarted the empire and prevented further
aggression against Iran and beyond, now off the table.
Or maybe not. When wounded and cornered, desperate
animals and politicians may try anything with nothing to
lose. Keep a close watch.
Stephen Lendman lives in Chicago and can be reached
at lendmanstephen@sbcglobal.net.
Also visit his blog site at sjlendman.blogspot.com and
listen to The Steve Lendman News and Information Hour on
TheMicroEffect.com Mondays (moved from Saturdays) at
noon US central time.
