Chris Hedges on "Murdering the Wretched of the Earth"

There's a reason the Muslim poor flock to radical Islam, several reasons in fact.  They've been discussed at length before but Chris Hedges, in light of the massacres ongoing in Egypt, recaps:

Radical Islam is the last refuge of the Muslim poor. The mandated five prayers a day give the only real structure to the lives of impoverished believers. The careful rituals of washing before prayers in the mosque, the strict moral code that prohibits alcohol, along with the understanding that life has an ultimate purpose and meaning, keep hundreds of millions of destitute Muslims from despair. The fundamentalist ideology that rises from oppression is rigid and unforgiving. It radically splits the world into black and white, good and evil, apostates and believers. It is bigoted and cruel to women, Jews, Christians and secularists, along with gays and lesbians. But at the same time it offers to those on the very bottom of society a final refuge and hope. The massacres of hundreds of believers in the streets of Cairo signal not only an assault against a religious ideology, not only a return to the brutal police state of Hosni Mubarak, but the start of a holy war that will turn Egypt and other poor regions of the globe into a caldron of blood and suffering. 

The only way to break the hold of radical Islam is to give followers of the movement a stake in the wider economy, the possibility of a life where the future is not dominated by grinding poverty, repression and hopelessness. If you live in the sprawling slums of Cairo or the refugee camps in Gaza or the concrete hovels in New Delhi, every avenue of escape is closed. You cannot get an education. You cannot get a job. You do not have the resources to marry. You cannot challenge the domination of the economy by the oligarchs and the generals. The only way left for you to affirm yourself is to become a martyr, or shahid. Then you will get what you cannot get in life—a brief moment of fame and glory. And while what will take place in Egypt will be defined as a religious war, and the acts of violence by the insurgents who will rise from the bloodied squares of Cairo will be defined as terrorism, the engine for this chaos is not religion but the collapsing global economy, a world where the wretched of the earth are to be subjugated and starved or shot. The lines of battle are being drawn in Egypt and across the globe. Adli Mansour, the titular president appointed by the military dictator of Egypt, Gen. Abdul-Fattah el-Sisi, has imposed a military-led government, a curfew and a state of emergency. It will not be lifted soon.

He's right.   We support those who created the conditions of despair for the masses, who drive them into the arms of radical extremists, and then we dehumanize them, the better to prepare for their slaughter.  As Hedges points out, again correctly, this is only just getting started.

What is happening in Egypt is a precursor to a wider global war between the world’s elites and the world’s poor, a war caused by diminishing resources, chronic unemployment and underemployment, declining crop yields caused by climate change, overpopulation and rising food prices.

The belief systems the oppressed embrace can be intolerant, but these belief systems are a response to the injustice, state violence and cruelty inflicted on them by the global elites. Our enemy is not radical Islam. It is global capitalism. It is a world where the wretched of the earth are forced to bow before the dictates of the marketplace, where children go hungry as global corporate elites siphon away the world’s wealth and natural resources and where our troops and U.S.-backed militaries carry out massacres on city streets. Egypt offers a window into the coming dystopia. The wars of survival will mark the final stage of human habitation of the planet. And if you want to know what they will look like, visit any city morgue in Cairo.   

What Do We Do If The Global Economy Fails?

The global economy is a relative newcomer, at least for most of us.   There's always been global trade but it was subject to capital controls, tariffs and import restrictions.   Then, as the world moved out of the world wars and cold war of the 20th century, conditions arose that allowed the scrapping of capital controls, tariffs and trade restrictions and most of the world embarked on global free trade of sorts.

I think we're seeing now that global free trade has not worked as promised.  It created a certain surrender of sovereign powers by our governments and, with that, a transfer of political powers that fed the rise of corporatism and, in some countries, the ascendancy of the corporatist state.   Although we do our best to look the other way, there are countries such as the United States in which corporatism has insinuated itself between the electorate and the political classes, the ultimate corruption of the notion of government "of the people, by the people, for the people."

American corporatism is, arguably, the engine driving the evolution of the first modern "warfare state."  Imagine, one nation representing just 5% of the world's population carrying the burden of more military spending than the combined military spending of every other nation representing fully 95% of the world's population.  In that lies the utter cancerous madness of corporatism.  Even now the House is moving to cut $1.2 billion in spending needed to maintain in operation a satellite, hurricane early warning system even while continuing to squander $10-billion every month in Afghanistan.

But, while American corporatism may furnish the anchor of global capitalism, it's unclear that it will hold.   Globalization is the product of a number of favourable circumstances all coming together more or less simultaneously.   One key aspect is cheap transportation which, as everyone realizes, is threatened by the arrival of "peak oil."    The global demand for oil is going up even as production begins to wane, witness the quest for unconventional oil such as bitumen.   But transportation is just one of several critical factors needed for gobalized industrial capitalism.  What are the others and how secure are they?

Global corporatism is also entirely dependent on global social, political and military stability.   When your business relies on products from a dozen nations, instability in even just a couple of them can bring your operations to a halt.   Take Dell computers, for example.   A news/information item a few years ago focused on Dell's global manufacturing structure.   It emerged that every Dell computer was dependent on key parts and components sourced from something in the order of 30-countries.   A number of those components were single-source.  Upheaval in the source country could sever supply of essential components without which Dell would be unable to complete and ship its product.   The losses, it was said, would be devastating.

The 21st Century is already being called the "Century of Revolution."  Destabilizing change is upon us and is not limited to isolated countries here and there.  We continue to watch the Arab Spring unfold.  Tunisia, Egypt, Yemen, Libya have fallen and now Syria is entangled in upheaval bad enough that even its traditional Shiite ally, Iran, has broken with the Damascus government.   Waves of riots have swept European states - Greece, Italy, Spain, even Britain has not been immune.

One thing globalization has achieved is the concentration of wealth, and power, in the hands of the few.  American consumers hunker down in insecurity all except for one segment, the rich, who are buying luxury items at a furious pace.   At upscale stores, high-price goods are flying off the shelves.

This concentration of wealth has spurred wage stagnation, wealth inequality and the choking off of social mobility.   Making one's way up the social ladder is now far easier in Europe than in the land of the "self-made man," the United States.   America's middle class, blue and white collar, is in tatters, its anger shrewdly misdirected by the richest of the rich into hapless movements like the Tea Party where the vulnerable are taught to turn on their own.   Their homes under foreclosure, their savings lost, saddled with debt, their pensions, Social Security and Medicare under attack, they inhabit a dysfunctional nation more divided, and deadlocked, than at any time since the Civil War.

This sets the stage for an era just beginning to witness the impacts of global warming and climate change.   Earlier this week, the risk analysis firm, Maplecroft, released its 2011 Food Insecurity Index.  The map below shows countries with relatively good food security in green.   The rest face medium (yellow), high (brown) or extreme (red) food insecurity.   And this is for 2011 which marks just the beginning of the climate change impacts we will experience this century.

The US National Center for Atmospheric Research, confirming other predictions, has forecast global drought conditions that can be expected for 2030-2039 which are shown in the map below.

 

As can be seen, many heavily populated areas face protracted drought over the coming decades.  Drought of course drives famine, unaffordable food prices, mass population migration and wars.  It also undermines the global political, social and military stability so vital to globalization.

What then is the future of globalization for the world and for Canada?   We see many factors that imperil its continuation even in the mid-range but we show little interest in the question.   Is the global economy capable of functioning in this rapidly changing world?  If so, what will it need to do to adapt?   How should our country be changing its institutions and policies to facilitate adaptation requirements?  What do we risk if we don't?  What if the global economy dissolves under the forces of peak oil or widespread and protracted political, social and military instability?   What would we need to do to adapt to that?   How should our country be repositioning our institutions and policies to meet that potential challenge?  What do we risk if we don't?

We fear more the possible consequences of even discussing these questions than we do the potentially dire consequences of ignoring them.   And so we will continue with our heads firmly stuck in the sand.  Societies that fall into that trap rarely fare well.

Here's a thought-provoking, informative discussion of the future of globalization with Rob Hawkins from a series on peak oil and climate change produced by The Nation:

Kapitalism = Capitalism - Regulation

Karl Marx had a theory of capitalism that few of us have managed to understand and fewer still accept.  We wrote him off as a communist agitator, an enemy of democracy and our economic model.   In that, we failed to heed his warnings, dire predictions that have now arrived at our feet.

What we're learning the hard way is that capitalism works best for us when it's subordinate to the state, that is to say it's regulated.   Today the evidence is inescapable that capitalism without regulation becomes the Kapitalism that Marx foresaw.

Ronald Reagan and his followers like Brian Mulroney ushered in an era of deregulation that achieved a near-religious stature.   Republicans to this day, whackos like Rick Perry, still worship at the altar of deregulation despite all the damage that has caused their country and their people.

A word about deregulation.   When you see a politician preaching deregulation you should immediately look for the "for sale" sign tattooed on his forehead.   A politician in a mood to deregulate is generally a politician with something to sell.   What he's selling, in many cases, is the public interest but, of all the forms of political larceny, deregulation is, hands down, the safest.   Sell government assets out the back door and you can go to jail.   Get caught fixing a contract and you may be headed for the Greybar Hotel.   Push through deregulation and you're merely freeing up the economy.  That's why there are six registered lobbyists for every member of the House and Senate - to buy subsidies, tax favouritism, and deregulation for the rich and powerful.   Now, in fairness, not all deregulation is corrupt but a lot more of it is than we often recognize.

But let's get back to Uncle Karl. Writing in today's Sydney Morning Herald, the senior economic advisor at UBS, George Magnus, suggests Marx saw this coming in deregulated capitalism:

As he wrote in Das Kapital, companies' pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an "industrial reserve army" of the poor and unemployed: "Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery."

The process he describes is visible throughout the developed world, particularly in the US companies' efforts to cut costs and avoid hiring have boosted US corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 per cent and real wages are stagnant.

US income inequality, meanwhile, is by some measures close to its highest level since the 1920s. Before 2008, the income disparity was obscured by factors such as easy credit, which allowed poor households to enjoy a more affluent lifestyle. Now the problem is coming home to roost.

Marx also pointed out the paradox of over-production and under-consumption: The more people are relegated to poverty, the less they will be able to consume all the goods and services companies produce. When one company cuts costs to boost earnings, it's smart, but when they all do, they undermine the income formation and effective demand on which they rely for revenues and profits.

This problem, too, is evident in today's developed world. We have a substantial capacity to produce, but in the middle- and lower-income cohorts, we find widespread financial insecurity and low consumption rates.

The result is visible in the US, where new housing construction and automobile sales remain about 75 per cent and 30 per cent below their 2006 peaks, respectively.

As Marx put it in Kapital: "The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses."

So what is the answer?  We could begin by acquiring an adult view of government regulation.  Blindly accepting that regulation is inherently bad is good for someone, just not you or me.   The Crown Prince of deregulation is globalism, free trade.   Governments surrendered state sovereignty to corporatism, their sovereign right to impose tariffs and trade restrictions to benefit domestic economic and political interests.   It leads to massive job outsourcing and income inequality.  Go back to what Magnus wrote:

"When one company cuts costs to boost earnings, it's smart, but when they all do, they undermine the income formation and effective demand on which they rely for revenues and profits."  Nike may like to make those trainers in Vietnam with $3 a day labour but they depend on other companies at home paying their employees $25 an hour so they can afford to buy those shoes.

We need to realize that Marx was right when he wrote that capitalism can self-destruct and, left to its own devices, probably will.   That is what's happening today.   Capitalism doesn't operate as an organized, self-regulating force.   In practice it looks much more like "for profit" anarchy.  If it is going to benefit our societies instead of undermining them, we have to tell it how it is going to behave.  Like an unruly child, it needs boundaries, limits.

Most of all we need a new generation of leaders, a generation whose future financial wellbeing hasn't already been assured.   We need a fresh crop of leaders with vision who can explain these lethal paradoxes to the public and rally support for reform.  Above all else, we need to rid our country of those who would prefer to rule not lead, those who have no vision of the challenges that lie ahead.

We have to recognize the social dimension to healthy capitalism because that is what generates stable, robust societies.   Economic income has to be fairly apportioned between capital and labour to bolster "income formation and effective demand on which companies rely for revenues and profits."   That's not programmed into the system that is the true legacy of Reagan, Thatcher and Mulroney.   They left that out entirely and that was very much by design.

What Adam Smith Didn't Know. The "Invisible Hand" of the Market is Holding a Knife to Our Throats.

We weren't supposed to have to worry about such things.   The "market" was supposed to be self-regulating, self-correcting.   Adam Smith told us as much and, after all, he was a Scot.

But the free market capitalism that Smith foresaw was an illusion, a theory that worked moderately well for a good long while - until it didn't.   Now some, such as noted economist Nouriel Roubini, ponder whether Marx wasn't right when he described capitalism as inherently self-destructive.  The Guardian warns that the modern perversion of capitalism is ready to blow.  Nobel laureates Krugman and Stiglitz have been warning us for so long they're getting warned out.   Robert Reich implores us to recognize, in time, that wealth inequality of itself will doom our consumer economy with the rich taking the greatest losses but the poor suffering the greatest misery.

Now it's Paul Woolley speaking out.   The expert in market dysfunctionality who founded a research institute into the subject at the London School of Economics, tells Der Spiegel that today's markets are spinning out of control.

The developments in recent weeks have made it quite clear that the markets don't function properly. Things are spinning out of control and are potentially dangerous for society. Only a fraternity of academic high priests connected to the finance markets is still speaking of efficient markets. Still each market participant is pursuing their own selfish interests. The market isn't reaching equilibrium -- it's falling into chaos.

...The finance sector can -- and is -- growing until it overwhelms the economy. In good years the US finance industry cashes in on more than 40 percent of all corporate profits. In bad years they are saved by the taxpayers. The agents are doing a devilishly good job of developing innovative, complicated new products that people can't understand. It gives them the opportunity to earn excess returns and attract the best talent. While they are acting rationally, the result is a catastrophe.

Woolley's focus is on reforming the markets.  He doesn't believe governments still have the ability to regulate market stability.  His view is that it is up to the truly big investors to compel fund managers and bankers to mend their devious and avaricious ways.  Yet, while Woolley's proposals could, if enacted, restore some commercial stability to world markets, they would no nothing to answer the greatest threat, the social challenge.