The US Left Now, Part [2]

["Jurriaan Bendien" <J.Bendien@xxxxxxxxxx>]

[2] Capitalists and capitalists

In my opinion, for the purpose of the current discussion, we may classify
capitalists in the US as: (1) those who benefit from poverty, inequality,
instability, uncertainty, and conflicts, (2) those who benefit from more
economic opportunities, certainty, and stability, and (3) those who don't
care one way or another or who have their bets evenly spread.

The three types are capitalists.  They are driven by the profit motive.  We
should not attribute to them intrinsic virtues they do not have.  That means
that, under certain conditions and if they think they can get away with it,
most will avoid taxes, lay us off, cheat and abuse whomever they can.  Of
course, the classification is simplistic.  In reality, there are all sorts
of shades and mixes, and people move around.  But that doesn't invalidate
the classification.  The issue here is that it matters how they make their
profits.  These conditions will push them to adopt different positions on
the different issues of the day.  I'll describe the first two types next.
(I'm very tentative about this as I have no time to try a better factual
description of the relative weight of these groups of capitalists, but I
find it crucial to make the distinctions.)

The first type is the most dangerous.  These are military contractors, big
oil ventures, the prison economy, etc.  Roughly speaking, they tend to be in
industries where competition is pursued less by quality improvement and
innovation than by government patronage and networking among the powerful
and influential.  I'd even include some big farming, tobacco, and sugar
production.  These are the adventurous, unscrupulous type of capitalists
that "know how to deal" with the leaders in the Third World: bribing
high-ranking officers, selling them weapons, propping them up, and getting
rid of them if stand in their way.  Understandably, these capitalists have
little regard for international law and multilateralism.  They will
emphasize military muscle and nationalism.  Their economic interests will
foster their views of the world as a zero-sum game, where they are to
protect their lot and enhance it by force or threat thereof.  They are used
to making big quick profits and use governments for that.

The second type may not very different in a moral sense.  But it's clear
that their economic interests make them crave for stability and certainty in
the world economy.  Those are the conditions that allow them best to grow
and thrive.  Their financials depend crucially on foreign revenues.  They
are the ones who push for laws like those that punish US corporations that
bribe foreign dignitaries.  They emphasize international cooperation,
international law, multilateralism, etc.  They would even be willing to give
up the use of force internationally as long as there is a credible and
legitimate way to enforce order and stability in the world.  Their profits
are at stake.  I think most US corporations of international scope fit or
would like to fit into this category.  Garten is right in saying that they
have much to lose if chaos prevails in the world.  Furthermore, some of
these capitalists seem to understand that poverty and inequality in the
Third World impose a huge opportunity cost on them.  They think that if the
poor countries were less poor, that'd mean more business for them.  So, they
are not opposed to improving things in the Third World.  Unfortunately this
doesn't necessarily mean that they are willing to put their money where
their mouth is.

I believe economists like Stiglitz rationalize their interests aptly.  For
instance, Stiglitz has argued in favor of land reforms in the Third World in
order to reduce inequality and set off capitalist growth.  This is truly
remarkable given that, during the Cold War, US governments and ideologues
opposed even the most timid land reforms.  They were regarded as the prelude
to full-fledge communism.  The CIA overthrew Arbenz in Guatemala because he
was promoting, not communism, but a land reform!  Like old, pre-Marxist
political economists, now Stiglitz, a respected member of the Anglo-Saxon
economics establishment, says that land reforms are not only okay, they are
necessary for capitalism in the Third World!

I'd go further.  This is linked to claims by economists such as Torsten
Persson and Guido Tabellini ("Is Inequality Harmful for Growth? Theory and
Evidence," Unpublished Paper, 1991), George Clarke ("More Evidence on Income
Distribution and Growth," University of Rochester, Unpublished Paper, 1993),
and Alberto Alesina and Dani Rodrik ("Distributive Politics and Economic
Growth," The Quarterly Journal of Economics, 1994) that, as demonstrated by
careful econometrics on credible international data, there is a robust
negative correlation between wealth and income inequality and economic
growth.  In other words, inequality - the sine qua non condition for
capitalist production to exist - sabotages long-term capitalist growth.
Capitalists whose profits depend on technological innovation and
international growth must be paying attention to these findings.
Realizations of this type even by the World Bank are what underly the sudden
"discovery" by Camdesus that Cuba's socialist experiment, in spite of the
hellish conditions in which it has been carried out, has remarkable
achievements to show!

When the second type of capitalists had to deal with the Soviet Union, the
perceived threat to markets and private ownership at a global scale, they
turned to the first type to protect them, just like storeowners in
Hollywoodized Little Italy turned to Vito Corleone for "protection."  This
of course gave the first type of capitalists a lot of clout.  Virtually, the
Pentagon budget was (is) theirs, all courtesy of US taxpayers -- and the
rest of the world's seignorage dues to the US Treasury.  They were able to
buy the politicians of entire states and establish a system of patronage.
Financially it is known that the Pentagon is the most mismanaged agency in
the US government.  How convenient!  I'm not entirely sure about this, but
I'm under the impression that there are a few states in the South and West
whose economies depend too much on the Pentagon's and the Department of
Justice's budgets.  No wonder politicians from these states are among the
most conservative in foreign and domestic policy.  And this all feeds back.
(This coincides with, as Garten says in his book, the discredit of leaders
of corporate America after the "excesses" in the boom, who have more the
leanings of second-type capitalists.  So, according to Garten, they better
shut up and avoid criticizing a foreign policy that, if carried through,
will hurt their business in no small way.)

The military buildup during the cold war made the first type of capitalists
very powerful.  But there's no Soviet Union anymore, and the only way the
power of the first type can assert itself is if the first type of
capitalists and the conservative middle class are fearful of anti-capitalist
or anti-Western threats.  That's why Cheney and Rumsfeld have this sense of
urgency to uncover threats to US capitalism, real or imagined.  The 9/11
attack came in very handy to them.  In that sense, the terrorits did them a
favor.  But as demonstrated by David Armstrong ("Dick Cheney's Song of
America," Harper's Magazine, Oct. 2002), the "Bush doctrine" is the SAME
doctrine, point by point, that Cheney made public back in 1992: "Defense
Planning Guidance for the 1994-1999 Fiscal Years (Draft),"  Office of the
Secretary of Defense, 1992.  9/11 just gave them the excuse to try to shove
it down the throats of the US people.

In my opinion, it's clear that the left in the US -- again, if it wants to
grow and win -- has to find common ground with the second type of
capitalists.  If the left were strong enough to lead the country by itself,
then obviously no common ground would be required.  The fact is, now, the
left is almost irrelevant.  It has to become relevant and the movement
against the Bush doctrine abroad and the Ashcroft doctrine at home gives the
left a tremendous opportunity to grow and become an influential political
force in the US.  It can seize the opportunity or squander it.



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