Re: Why is capitalism in crisis?

[Charles Jannuzi <b_rieux@xxxxxxxxx>]

I think this Counterpunch article is one worth
reading; however, if the author is going for even
more mass consumption (like an Op-Ed space in a
paper somewhere), he ought to consider the
possible weakness of his perspective and how it
undercuts his thesis.

The major weakness of the analysis, I believe,
can be found in this excerpt:

>>The ideologues of capitalism only dwell on its
virtues, and ignore its problems. Thus, they do
not talk about the problems of "crony capitalism"
that brought about the Asian financial crisis of
1997. Nor do they discuss Japan's decade-long
spell of economic stagnation. They look past the
dot-com bubble that burst in the US in the spring
of 2000 and the wave of corporate scandals that
began with Enron and WorldCom and ultimately
touched dozens of American companies. None of
these events register with them.<<

Actually if you look around the sites and texts
of the ideologues (mostly American capitalist
think tanks and 'analysts' at investment banks
and private equity firms) you find it is they who
make so much of the Asian crisis of 1997 and
Japan's decade-long recession. Look at western
business press coverage of Japan. It's all over
the place. First, Japan was not a true capitalist
country and so a threat (to the US). Then Japan
was not a true capitalist country but one iwth a
truly f-ed up economy, so now a security risk to
the US.

According to the ideologues, SE Asian economies
and Japan just weren't pure enough. That, simply,
is how their ideological discourse machine
swallows up economic history. Of course, there
isn't any good empirical evidence to support
their conclusions, and I can show some empirical
evidence that would support an argument in the
exact opposite. The US investment bank factotums
tried to pin the Asia crisis on everyone but
themselves. They even claimed it was a 'weak' yen
that caused the crisis. That's interesting given
the fact that since 1971 the yen has done pretty
much only one thing against the
dollar--APPRECIATE. Evidence from economists in
SE Asia points more and more to half-assed
regulation of global financial markets and a
cheap dollar policy against the yen as leading to
the Asian crisis of 97.

But do you see how perfect the arguments coming
out of the AEI and like are? Take Japan for
example. If Japan doesn't reform along the lines
outlined by the AEI (or even Brookings) or
whatever (never mind the inconsistencies and
outright contradictions across the think tanks),
it is doomed to fail. But if it does do this or
that (ill-avised) reform and fails, it's simply a
case of too little too late. It is unassailable
discourse that swallows its own tail and is not
really open to any sort of critique. Going from
such a hermetically sealed discourse to the
investment bank thesis that it was 'crony
capitalism' that created and fed Asia's crisis in
1997 is as automatic for the market ideologues as
breathing is.

There is an alternative history shaping up here,
but it seems to be one neither the strategic
pro-globalists or anti-globalists are prepared to
grasp.

That is, back in the 80s a bunch of national
security state ideologues (as extreme US
nationalists typically also high up in US
companies) put in place a strategic US trade
policy that is at the root of 'capitalism's'
current crisis. Basically, Japan--and then
Germany as the center of Europe--were seen as at
least potential enemies.

The strategies put in place?

--a relatively weak dollar vis-a-vis the yen and
DM (now euro, which the dollar has cheapened
against in the last year)

--a core of industries and companies felt too
strategic to globalize (namely defense hardware
and 'service' companies)

--strategic priority for US dominance in:

-energy and energy deregulation
-oil, gas and extraction infrastructure (ties in
with energy)
-computer software and hardware (WINTEL monopoly,
mission accomplished)
-agricultural exporting (if only Australia and
Canada would lie down now that Argentina has)
-'deregulated' financial services (US private
equity is buying up Asian banks like crazy now
that the crisis of 97 left so many 'distressed
assets')
-aerospace (ties in with defence, if only Airbus
could be put down)
-telecoms and telecoms deregulation

Chances are if GE is in it, it's a 'strategic
priority'. Also, look at the investment patterns
of Warren Buffet and you soon get the idea.

Combine such strategic trade priorities with (1)
bilateral trade agreements that often dampen
global trade rather than promote it (such as the
way the NAFTA as a trade cartel was also designed
to shut Japanese goods out of the NA market), (2)
the usual US capitalist trade embargoes that
violate all free trade principles (against Cuba,
against N. Korea, against New Zealand back in the
early 90s, against Iraq, against Libya, against
Yugoslavia), (3) outright trade protectionism
(dumping charges, tariffs) and you get a
US-created and led system in total crisis.

Notice how the indicator species of the damaged
environment are Japan and Germany, not the US.

Charles Jannuzi
Fukui, Japan






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