RE: [A-List] Has China Become an Ally?

["Mark Jones" <markjones011@xxxxxxxxxxxxx>]

Chris Burford wrote:
>
> Very interesting and important debate. I would love to see US hegemony in
> terminal decline but how to choose between seeing Europe or China as a
> greater threat? Over a thirty year period China may be the
> greater threat,
> but over the next ten years Europe, for all its sluggishness, has a
> considerable ability to centralise masses of advanced capital, and might
> decide to become more competitive at the expense of its working
> class. Are
> there any figures that help us to decide between these two main scenarios?
>

I don't see from where Europe will get the political clout to 'decide' to
take on the US; for one thing, it's been doing that ever since 1949 (if not
for the whole period since 1914). Germany and Japan had considerable success
in the 1960s-1970s and managed to face off competitive US devaluations when
Nixon scrapped Bretton Woods and the Gold Standard in 1971. Essentially the
German/Japanese strategic choice lay between competing by devaluing their
own currencies, or competing by raising productivity and securing their
competitive advantage by technological advance, capital-deepening and raised
quality. Both strategies are very dangerous when you are manoeuvring against
the hegemonic power whose currency (the dollar) is global currency of last
resort and also the medium thru which international trade is transacted; the
US enjoyed all the benefits of seignorage plus of course, the ultimate
precious asset of having oil denominated in dollars. Nevertheless, for a
while the German/Japanese strategy of allowing their currencies to revalue
was successful. They avoided the deflationary consequences and social risks
of having over-valued currencies (which leads to loss of external markets,
mass unemployment and industrial collapse) because they were indeed so good
at raising productivity rates and outcompeting the US technologically.
Still, both economies have endured long-term damage as a result of endemic
deflationary pressures lasting almost 30 years now, and which have finally
strangled growth in Germany and produced high levels of unemployment in both
Germany and Japan, where growth has also been impacted obviously.

Now the neolibs (and you are echoing them?!) are saying that the EU lost
competitiveness because of 'structural rigidities', lack of institutional
reform especially in the labour-market, too high levels of taxation and
welfare spending. Get rid of this, and bingo, Europe will unleashed will
rebound. The example is Britain, which did get rid of all this and did
rebound (the say).

This is all 21 carat bullshit of course. (a) Britain this year has a higher
level of tax as proportion of GDP than Germany, and is having to spend
ferocious on public services to make up for the devastation of the Thatcher
era of 'dynamism', 'labour market flexibility' etc (the schizoid attitude of
the Blair/Brown govt to these issues is mind-boggling to behold. In almost
the same breath the lecture 'the Continent' about the need for neolib
reforms, while patting themselves on the back for doing the exact opposite
at home, where they've raised welfare standards, introduced a minimum wage,
given labour new rights etc etc. How weird is all that?).

And (b) the real and obvious intent of neolib (i.e. US) 'fraternal advice'
to Germany and Japan is to drive a stake thru the hearts of these
once-feared competitors while there is still time. The results of the
post-1949 competitive/accumulation cycle were something of a stalemate;
Germany/Japan did not trash the US economy, but that's not in great shape to
assume Bush's megalomaniac military burdens either. If however Germany/Japan
do take neolib advice to become 'more competitive' and to 'centralise masses
of capital' as you put it, then the consequences will be deepening
inequality and the exact opposite of Giscard's vaunted Europe of 'justice,
solidarity and rights'. And insofar as the strategy succeeds in raising
output while also reducing European final demand (by impoverishing more
workers) all that this Napoleonic vision can do is to deepen world
deflationary processes and intensify the downward accumulation spiral.
Genius.

The point is this: Europe cannot 'decide' anything while it is tied by
millions of political and above all military bonds to US strategy, plastered
over with US bases and incapable of having a single European voice, a single
EU foreign policy. Europe cannot become whole and free unless there is
*first of all* a substantive father weakening of US hegemonic power, and
THAT can only happen as a result of its failure to compete with China, QED.

The US will not attack Iraq except in concert with its 'allies' but in this
case cannot hope to extract the benefits it seeks because they won't agree
to anything but a proper divvying-up of the spoils and they want Bush to
sign off to this in blood (his own preferably) because no-one trusts
perfidious U!S!A! U!S!A! anymore.

This is why Bush won't do it, pari passu. Because the well-known and much
discussed risks of sending Tommy Franks as Legate (in a leather skirt,
looking like Gladiator?) to Iraq are not worth taking unless the guaranteed
result is to cow the rest of us into silence, and that just ain't happening.

Mark