The Sorrows of Empire (41 page)

The aftermath of September 11, 2001, more or less spelled the end of globalization. Whereas the Clinton administration strongly espoused economic imperialism, the second Bush government was unequivocally committed to military imperialism. The Bush administration’s adoption of unilateral preventative military action undercut the international rules and norms on which commerce depends. Increasingly, even people who believed in globalist solutions to international economic and environmental problems threw up their hands in despair. At the August 2002 world summit on sustainable development in Johannesburg, the delegates wore badges asking, “What do we do about the United States?”

“The central political idea of imperialism,” wrote the political philosopher Hannah Arendt, is “expansion as a permanent and supreme aim of politics.”
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This is true of all empires—witness the endless wars of ancient Rome, the subjugation of Asia by the Mongols and Ottoman Turks, Spain’s rape of the Western Hemisphere, Napoleon’s ambitions to unite Europe under the French flag, Britain’s search for new investment opportunities for its capitalists, the Third Reich’s attempts to seize lebensraum for its racially defined nation, and now an insatiable American appetite for ever more military bases. Imperialism cannot exist without a powerful military apparatus for subduing and policing the peoples who stand in its way and an economic system for financing an expensive and largely unproductive military establishment. Thus far in this book I have dealt primarily with the military side of American imperialism. Now I turn to America’s attempted
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hegemony over much of the world. My intent is to examine the elaborate ideology of “neoliberalism” that has obscured America’s international endeavors before the triumph of unilateral militarism and to reveal how militarism has displaced and discredited America’s economic leadership. Ironically, it is in this economic sphere that the overstretched American empire will probably first begin to unravel.

Following World War II, America’s military might and economic
assets were so great that it met with very little resistance of any sort, except from the Soviet Union and its allies and satellites. From the onset of the Cold War until about 1980, those countries that chose to belong to neither the Communist nor the capitalist camps—the so-called Third World—had room to maneuver by playing one superpower against the other. The superpowers, even though they possessed weapons of mass destruction, were often hesitant to exert direct imperial control over these contested nations because they feared that any of them might then bolt to the other camp. The nonaligned countries also had some freedom to experiment with different paths and arrangements that might lead toward “economic development” in accordance with their own cultural traditions and whatever norms they chose of distributive justice. These nations were said to be “underdeveloped,” meaning that they had little industry or technology but instead supplied agricultural products and raw materials to the developed countries of the north. In theory, this was to be a mutually beneficial trade that would eventually lead to the industrialization of the Third World, bringing it wealth and true sovereignty.

This situation started to change in the early 1980s. The threat of a superpower war receded as the United States and the USSR became accustomed to their respective roles in the elaborate pas de deux of detente and arms control. Both countries also began to show signs of economic fatigue as the Cold War ground on. The USSR, much poorer than the United States, was by far the more seriously affected as the rigidities of its economic doctrine stood in the way of most forms of entrepreneurship and industrial innovation. Still a mighty military power, the USSR became increasingly bifurcated economically into an authorized and an informal, or “underground,” sector. Without the latter it would have collapsed much sooner than it did. From the mid-1980s on, Premier Mikhail Gorbachev sought to reform the ailing economy, but he was ultimately undercut by deeply entrenched vested interests. The United States knew about these problems but pretended in its intelligence estimates not to notice so that it could continue to pour money into its own military machine.

Even though the Soviet Union had lost its potency as an economic challenger, the United States and its allies had for some time been worried
by other trends. The General Agreement on Tariffs and Trade (GATT), the rules governing the opening of trade drawn up by the United States and Britain late in World War II and subsequently signed by some twenty-one other nations, had ensured spectacular growth in international trade. (The purpose of GATT was to prevent a recurrence of the economic nationalism and the collapse of international trade that had caused the Great Depression and contributed directly to the emergence of totalitarian regimes in Europe and Asia.) Between 1948 and 1995, when GATT was replaced by the World Trade Organization, international trade expanded from about $124 billion to $10,772 billion.
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This pattern was fine with the United States so long as its trade balance remained favorable and it could dictate the terms on which others participated in the good times.

The 1970s, however, had already ushered in a period of questioning about where the capitalist world was heading. The American and British economies were plagued by “stagflation” (high rates of inflation combined with low economic growth), high rates of unemployment, large public-sector deficits, two major oil crises as producer nations sought to influence the policies of consuming nations, racial strife, and, for the United States, defeat in Vietnam. Equally ominous, by the mid-1980s, Japan had displaced the United States as the world’s leading creditor nation, while America’s fiscal deficits and its inability to cover the costs of products imported from foreign countries turned it into the world’s largest debtor.

These circumstances allowed for the rise of conservative political parties and leaders—Ronald Reagan and Margaret Thatcher—in the United States and Britain. To revive international trade and, more important, put the United States back in charge of it, the new governments committed themselves to a rebirth of nineteenth-century capitalist fundamentalist theory. This meant withdrawing the state as much as possible from participation in the economy, opening domestic markets at least in principle to international trade and foreign investment, privatizing investment in public utilities and natural resources, ending most protective labor laws, enacting powerful domestic and international safeguards for private property rights, including, above all, “intellectual property rights” (that is, patents of all sorts), and enforcing conservative fiscal policies
even at the expense of the public’s health and welfare. This program, which soon became Anglo-American mainstream economic thought, was supposed to deliver “a widespread improvement in average incomes,” as Bruce R. Scott of the Harvard Business School puts it. “Firms will reap increased economies of scale in a larger market,” the thinking went, “and incomes will converge as poor countries grow more rapidly than rich ones. In this ‘win-win’ perspective, the importance of nation-states fades as the ‘global village’ grows and market integration and prosperity take hold.”
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Because the ideas of eighteenth- and nineteenth-century Scottish and English economists like Adam Smith and David Ricardo, from whom the new orthodoxy derived, were associated with the political movement in Britain called “liberalism,” the new economic dispensation was often called “neoliberalism.” In policy circles it became known as the “Washington consensus,” in academic life as “neoclassical economics,” and in public ideology as “globalism” or, more proactively, “globalization.” One of the leading academic specialists on globalization, Manfred Steger, says that it amounted to “a gigantic repackaging” of two centuries of classical liberalism, relabeled “the new economy.” Steger writes: “Globalization’s claims and political maneuvers remain conceptually tied to a ... nineteenth-century narrative of ‘modernization’ and ‘civilization’ that presents Western countries—particularly the United States and the United Kingdom—as the privileged vanguard of an evolutionary process that applies to all nations.”
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Perhaps the most deceptive aspect of globalization was its claim to embody fundamental and inevitable technological developments rather than the conscious policies of Anglo-American political elites trying to advance the interests of their own countries at the expense of others.
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In its spurious scientificity, globalism has proved similar to Marxism, whose roots lie in the same intellectual soil. As Steger points out, “While disagreeing with Marxists on the final goal of historical development, globalists nonetheless share with their ideological opponents a fondness for such terms as ‘irresistible,’ ‘inevitable,’ and ‘irreversible’ to describe the projected path of globalization.”
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In 1999, President Bill Clinton told an audience, “Today we must embrace the inexorable logic of globalization—
that everything from the strength of our economy to the safety of our cities, to the health of our people, depends on events not only within our borders, but half a world away.” At other moments, he indeed emphasized that globalization was “irreversible.”
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His successor, George W. Bush, continued to promote these same nostrums to a reluctant Latin America under a scheme he called the “Free Trade Area of the Americas.”
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The upside-down Marxism of U.S.-sponsored globalism has been noted by the distinguished diplomat Oswaldo de Rivero, the Peruvian ambassador to the World Trade Organization. He has written, “The ideological war between capitalism and communism during the second half of the twentieth century was not a conflict between totally different ideologies. It was, rather, a civil war between two extreme viewpoints of the same Western ideology: the search for happiness through the material progress disseminated by the Industrial Revolution.”
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As a government official from a part of the world devastated by globalization, de Rivero concluded that “the cost of the Soviet version of development was shortages and lack of freedom; today, that of the neoliberal, capitalist variant is unemployment and social exclusion.”
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Proponents of globalism, particularly American academic economists and political scientists, cling to it with religious fervor. The theologian Harvey Cox has drawn attention to this devotion in an article entitled “The Market as God.”
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Many otherwise sober business and political leaders in the United States have been carried away by globalization’s messianic claims. This phenomenon, too, is not new. Classical liberalism blinded no small number of Englishmen to the racism, genocide, and ruthless exploitation that accompanied the growth of the British Empire. As Hannah Arendt remarked about that earlier period of market worship: “The fact that the ‘white man’s burden’ is either hypocrisy or racism has not prevented a few of the best Englishmen from shouldering the burden in earnest and making themselves the tragic and quixotic fools of imperialism.”
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It is critically important to understand that the doctrine of globalism is a kind of intellectual sedative that lulls and distracts its Third World victims while rich countries cripple them, ensuring that they will never be able to challenge the imperial powers. It is also designed to persuade
the new imperialists that “underdeveloped” countries bring poverty on themselves thanks to “crony capitalism,” corruption, and a failure to take advantage of the splendid opportunities being offered. The claim that free markets lead to prosperity for anyone other than the transnational corporations that lobbied for them and have the clout and resources to manipulate them is simply not borne out by the historical record. As even the Nobel Prize-winning economist Joseph Stiglitz, a former director of research at the World Bank, has come to acknowledge, “It is now a commonplace that the international trade agreements about which the United States spoke so proudly only a few years ago were grossly unfair to countries in the Third World.... The problem [with globalists is] ... their fundamentalist market ideology, a faith in free, unfettered markets that is supported by neither modern theory nor historical experience.”
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It must be added that, until November 1999, when 50,000 protesters confronted the World Trade Organization in Seattle and began forcing a reluctant First World to acknowledge its exploitation and hypocrisy, statements like Stiglitz’s were not “commonplace,” nor had “modern” academic economic theory come to grips with the real nature of globalism.

There is no known case in which globalization has led to prosperity in any Third World country, and none of the world’s twenty-four reasonably developed capitalist nations, regardless of their ideological explanations, got where they are by following any of the prescriptions contained in globalization doctrine. What globalization has produced, in the words of de Rivero, is not NICs (newly industrialized countries) but about 130 NNEs (nonviable national economies) or, even worse, UCEs (ungovernable chaotic entities).
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There is occasional evidence that this result is precisely what the authors of globalization intended.

In 1841, the prominent German political economist Friedrich List (who had immigrated to America) wrote in his masterpiece,
The National System of Political Economy,
“It is a very common clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him.”
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Much of modern Anglo-American economics and all of the theory of globalization are attempts to disguise this kicking away of the ladder.