The end of globalisation won’t be televised, despite the hopes of the Western 99% (2/2)

Monday, 27 April 2020 5:46 AM  

By Ramin Mazaheri

Part 1 discussed how the West’s coronavirus response totally ignored the needs of their lower classes, and also how Iran’s “Resistance Economy” rejects Western economic liberalism (and neoliberalism) which has always sought to relegate non-Westerners to second-class economic partners.

As I have written previously, the West’s corona response is not just murderously mediocre but middle-class – it assumes everyone has a comfortable home, savings and a stable job. The West is employing quarantining, control methods and collective-over-individualist concepts used by Asian nations, but without having similar cultures of government economic intervention nor widespread trust in their governments. It is not hysteria to suggest that this could prove fatal to their bubble-filled, high-finance dominated economies.

There is a lot of foolish talk from Westerners, who are effectively forbidden to learn about and discuss how capitalism-imperialism truly operates, regarding how corona will cause supply chains to move back home. This has produced a lot of soon-to-be-forgotten agreement from their politicians, who are desperate to show that – all of a sudden – they care about their lower classes. Recall that the “end of irony” was proclaimed after 9/11 – will we see the “end of globalisation” because of coronavirus?

That’s funny.

The state of Delaware is where most US corporations are located and buy their charters – if it is not the world’s biggest corporate tax haven, according to The New York Times and The Japan Times, the state is certainly among the world’s top five. (Indeed, it should now be no surprise why Delaware senator Joe Biden was chosen to be Barack Obama’s running mate amid the 2008 economic crisis.) It could not be more crystal clear, even though neoliberals in the US often try to sow confusion about this fact: “Delaware corporate law requires corporate directors to manage firms for the benefit of shareholders, and not for any other constituency.” So anyone thinking corporations will sacrifice a mere fraction of their stock price in order to move supply chains back home are absolutely deluded about the possibility of patriotism, much less humanity, in “Capitalism with American characteristics”: their laws explicitly forbid it.

The post-corona persistence of neoliberalism – an ideology predicated on reducing government programs and expenditures for the 99% with ruthless efficiency – means that Western governments both national and local will be so strapped for cash in a post-Lockdown climate that they will be forced to try and save every nickel they can to maximise ever-more inadequate tax revenues and income. They will forced to buy from China, Haiti or whoever can save them pennies, because this is exactly what neoliberalism demands – it fundamentally neuters economic patriotism.

Urban hipsters who perhaps previously would pay premiums to “eat local” (because it is tastier) will soon find that unemployment (or a worsening of the seemingly never-ending underemployment for the West’s youth class) drastically alters one’s menu options. They would like to “eat local”, but many will be forced to forego the local farmers’ market to buy their food as cheaply as possible, and regardless of provenance.

So such talk from Esquire magazine bout how corona will usher in a new economy based around “resilience preparedness” is totally absurd: the very basis of globalisation is hyper-specialisation (Adam Smith) and turning every nation into a single cash crop/cow (David Ricardo’s comparative advantage) writ large, and these two concepts are the very opposite pole of resilience. Hyper-specialisation is hyper-resistant… but in one single area; if classic liberalism or modern neoliberalism or the “free market” selected your country to produce hygienic masks, congratulations! According to them you should jack up the price and the rest of us should not try to domestically produce our own.

Contrarily, we can say that Iran has tried to create “specialisation” in the normal way – within a single national economy’s different regions instead of all over the world, messianically and arrogantly. This is why they have employed a “resistance economy” (with many egalitarian principles held over from the “command/war economy” era), which is based around self-sufficiency, protectionism, government intervention to stimulate innovation in vital sectors, and government ownership in essentially every sector with medium or large importance. This, even more than the insistence that Islam is compatible with democracy, is why the West wages war on Iran.

The good news for Iranians: these economic principles are what promote resilience and preparedness, they curtail the indebtedness/poverty of the lower classes, and they will make Iran far more capable of weathering the economic turmoil of the coming months.

It is amusing that some in the West are now clamouring for sensible, humane, patriotic, efficient measures which Iran has employed for decades. Is Iran’s economic idea more exportable to Esquire if we call it a “resilience economy”, perhaps?

The Iranian economy in opposition to the West’s seemingly certain post-Great Lockdown economic chaos

At the root of this economic program is not anti-capitalism but anti-the-type-of-capitalism which today’s Iranians are violently confronted by: neoliberalism and globalisation. This form of capitalism is the most-geared towards maximising the profits and market concentration of the 1%, whereas a “resistance economy” is fundamentally-geared towards satisfying the needs of the Iranian 99%. The Koran sanctions capitalism, after all, but it bans usury and has clear exhortations to equality and the economic redistribution of massively-ordered charity. (If the West would simply follow the ban on usury – exorbitant interest and debilitating compound interest – they would be so much better off….)

If the Iranian Revolution did not satisfy the needs of their 99%… how can we possibly explain its endurance amid all the growth-sabotaging Cold War from the West? The question never was growth, after all, but re-distribution. The same logical argument stands for anti-imperialist Cuba and North Korea – caricaturing these nations as totalitarian oligarchies will continue to lose its false power for as long as these countries continue to not just endure but thrive (considering Western blockades), and for as long as the West’s post-1980 inequality entrenchment continues. Despite the looming economic crisis, does anyone really believe the West is culturally capable of reversing these inequality trends?

Undoubtedly, the West’s corona overreaction will make their economies – which were already in a Great Recession – even weaker.

Yes, this will force more Western domestic criticism of neoliberalism and globalisation, but will it really? How can it when France’s Muslims, US so-called “White Trash” and their lower-class counterparts across the “West + client” world cannot even be seen on their televisions? We are logical to believe that open criticism of the ideology of globalisation will be muted very shortly, because all these nations have airwaves which are dominated by a handful of corporations; contrarily, the Iranian government owns all the radio and TV waves – to get the outlook of not-always-selfless private media one can turn to Iran’s extremely critical, thriving print press.

Yes, the West’s reduced economies will necessarily reduce the influence and local reach of governments, but this reduced reach can easily be counter-balanced by the drastic quasi-martial laws which have already been employed. France almost certainly has the most over-policed corona lockdown (800,000 citations already), mais bien sûr: they just had an Islamophobia-based two-year state of emergency, which President Emmanuel Macron legalised into normal police practice.

Yes, the gut-wrenching reduction in wealth for the West’s lower classes may provoke “Western-style populism”, but this ideology is intrinsically reformist and not revolutionary. Look at the Five-Star Movement in Italy – it took them eight years to win significant power, but they have not been able to make significant changes. In their last national election the superb Yellow Vests gained merely half the votes of the (ugh) Animal Rights Party.

Yes, Westerners can see that all the evidence points to the necessity that they must change, but we must recall how very culturally chauvinistic they are: The West is hysterically convinced that their system is supreme – even among their “dissidents”, who are usually just “semi-dissidents” at best – despite all the evidence of failure and their perennial disregard of their own lower classes.

So combine this inherent conservativeness (liberal reformism), with neoliberal cultural saturation, with laws that forbid leavening neoliberalism, with “it’s not totalitarian when the West does it”, and it’s hard to compute a conclusion where the Great Lockdown produces a drastic reform of the Western economy, no? They have to overcome all of these trends, laws and false beliefs simultaneously and in great measure.

That would be a revolution. The West, the great thwarter of progressive revolutions, is supposedly now on the cusp of having one?

The only thing more idiotic than such talk are the commentators who accuse Iranian Reformists of being “neoliberals”, which is as stupid as calling Biden-backing Bernie Sanders or the French “socialists”. The Iranians most associated with the “resistance economy” are indeed Ayatollah Khamenei, ex-president Mahmoud Ahmadinejad and the Principlist Party, but the idea that Reformists aren’t hugely, hugely on board with countless resistance economy principles is just eye-rollingly wrong.

The reality – well-known in Iran – is that there is absolutely no room in Iranian politics for any political group which pushes ending the pro-99%, government-interventionist, fundamentally anti-neoliberal direction of the economy for this simple fact: they would never get re-elected by the 99%, and thus such a movement is necessarily finished before it could ever even could get started in Iranian democracy. Capitalism is sanctioned by the Qur’an, so it will always have a place, but neoliberal capitalism (again, all capitalism is not “neoliberalism” just as all socialism is not “violently atheistic Russian Soviet socialism”)? Not hardly.

Smith and Ricardo’s liberal ideas that each region should produce only that which it was perfectly suited to producing had one fatal flaw: such perfect harmony cannot possibly ever exist in a capitalist-imperialist system, because such a system is predicated upon competition. This is not a small flaw in their ivory-tower thinking, nor am I resorting to a mere humbug attack on “human nature” – competition, instead of cooperation, is a poor foundation for human stability and peace.

Such harmony and mutually-beneficial arrangements (and on a global scale, no less!) could only possibly ever be achieved in a world that has a basis which is definitely not neoliberal, which is very wary of capitalism’s excesses and constant exhortations to battles both big and small, and which tacitly accepts resolutely anti-imperialist and thus essentially socialist economics as the foundation.

You may not want Iran’s culture – that’s natural, they don’t want yours.

But across the West their lower classes are clamouring for an economy with many of Iran’s motivations and practices – they will be ignored, sadly.

Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of the books ‘I’ll Ruin Everything You Are: Ending Western Propaganda on Red China’ and the upcoming ‘Socialism’s Ignored Success: Iranian Islamic Socialism’.

The views expressed in this article do not necessarily reflect those of Press TV.

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Global Economic Collapse Reveals the Complete Failure of Neo-Liberal Capitalism

Written by Dr. Leon Tressell exclusively for SouthFront

• Fitch Ratings, ‘Unparalleled Global Recession Underway’
• Economist Sven Heinrich, ‘Central banks are weapons of economic mass destruction.’

As each day passes by data pours in revealing the immense economic damage caused by the Coronavirus pandemic. Most politicians and economic pundits will put the blame for up the economic hurricane, blasting tens of millions into unemployment, on Coronavirus lock downs. Fitch Ratings has given a brief snapshot of the unfolding economic catastrophe which it predicts will last well into the 2020s:

“World GDP is now expected to fall by 3.9% in 2020, a recession of unprecedented depth in the post-war period. This is twice as large as the decline anticipated in our early April GEO update and would be twice as severe as the 2009 recession.”

“The decline in GDP equates to a USD2.8 trillion fall in global income levels relative to 2019 and a loss of USD4.5 trillion relative to our pre-virus expectations of 2020 global GDP. Fitch expects Eurozone GDP to decline by 7%, US GDP by 5.6%, and UK GDP by 6.3% in 2020.”javascript:window[“$iceContent”]

Yet at the beginning of this year the financial media and political classes around the world were making rosy forecasts how we were going to experience moderate economic growth this year built upon solid economic foundations. There was no cause for worry or alarm just let global capital work its magic and trickle-down economics would ensure living standards would rise for all.

Fast forward 4 months and a global health pandemic has revealed how shallow, brittle and unstable were the economic foundations of the neo-liberal economic order that has been heralded as such a success since the Reagan-Thatcher era of the 1980s. These foundations were built upon infinitely low interest rates, an exponential rise in debt both public and private (sending global debt over the $250 trillion mark) and a massive increase in social and economic inequality. Alongside this, has been the intense exploitation of nations in the developing world and the use of regime change wars as naked resource grabs which cement the neo-liberal economic model in position.The world economy was slowing down during 2019 and heading towards a global recession. Japan’s economy had already entered recession territory in the last quarter of 2019, meanwhile PMI data from China and Germany indicated that they were hovering just outside recession territory.The global economy at the end of 2019 was teetering on the brink and just needed a catalyst or pin to pop the everything bubble which has seen massive inflation in the prices of paper assets across the globe ranging from stocks and bonds to derivatives such as collateralized loan obligations.

The anaemic economic growth experienced by global capitalism since the last financial crisis, which was a mere 12 years ago, has been based upon a gigantic expansion of the global money supply as central banks and governments mistakenly believe that the only way to sustain our debt fuelled economic system was to create ever more debt.

The last 12 years since the 2008 global financial crisis have witnessed an unparalleled wealth transfer from the working classes to the billionaire class which wields immense political influence over governments across the world. Central bank stimulus programs i.e. quantitative easing together with historically low interest rates fuelled a speculative bonanza which has pushed financial markets to all-time highs across the globe.

Meanwhile, governments across the world have sought to give the hard pressed billionaire class a helping hand by cutting capital gains, income and corporation taxes across the board. President Trump’s $1 trillion tax give away to the economic elites in 2017 is the most egregious example of this phenomena.

At the same time, wages for billions of ordinary people have stagnated or fallen whilst welfare benefits and health care have declined. We now have the utterly surreal situation whereby 26 billionaires control as much wealth as the poorest half of humanity amounting to over 3.8 billion people.

The working and middle classes together with the underemployed poor of the developing world were made to pay for the costs of the 2008 global economic crisis. Once the Coronavirus pandemic has finally burned itself out the working people of this world will be confronted with an economic depression which will rival and indeed may exceed in severity that of the 1930s. Governments across the board will once again seek to make ordinary people pay for the cost of the gigantic debts incurred by government and central bank bailouts.

In a desperate effort to prop up their system and protect the interests of their own class central bankers and corporate politicians across the globe are presiding over yet another wealth transfer that benefits the richest 1% in society. Bloomberg has noted how over $8 trillion has been printed out of thin air by global central banks and governments to prop up their debt fuelled system. The bulk of this horde of fiat money has gone to service the needs of Wall Street and its counterparts in London, Paris Frankfurt, Shanghai et cetera.The Wall Street Journal has openly acknowledged this truth in an editorial:

“The Fed may feel all of this is essential to protect the financial system’s plumbing and reduce systemic risk until the virus crisis passes, but make no mistake the Fed is protecting Wall Street first. The goal seems to be to lift asset prices, as the Fed did after the financial panic, and hope that the wealth effect trickles down to the rest of the economy.”

As the 2020s progress massive wealth and health inequalities, hunger and poverty will lead large numbers of people to question the hyper financialised economic system whose sole motive is to protect the interests of the 1%.

The American dominated monetary system which gives preferential treatment to the empire and its allies is in decline. Its decline will be exacerbated by the twin hammer blows of the Coronavirus pandemic and the global economic depression now unfolding.

During the coming decade the make the world will become an even more unstable place as the hegemonic power of our era seeks to maintain its dominant position in the global economy at the expense of other nations. The contradictions and tensions between the United States and its rival China will be greatly exacerbated during the next period. As we saw in the 1930s once these economic contradictions and tensions reach breaking point then the superpowers of the day have few course of action open to them beyond war or appeasement of their rival.Yet during the 1930s there were instances where the onward march to war could have been averted. If Republican Spain had defeated Franco’s fascist insurgency then the momentum towards war would have been slowed. It would have greatly strengthened the Popular Front government in France and halted the appeasement policies that allowed Nazi Germany to grow in strength like a cancerous tumour.
During the next decade there will no doubt be other such instances where the onward march to war can be averted.

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The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Blog!