During rare breaks from stories about who will become the next President of the US Empire, we news watchers stare at Greek and Spanish citizens engaged in massive protests against government austerity programs while the commentator babbles about “fears” of these countries dropping out of the sacred Euro zone as a result of failing economies and reluctance of Europe’s Central Bank to make loans to bail out the “slackers.” On US TV, we have seen countless stories of evictions and foreclosures, of workers leaving a factory that will shortly close down as a result of the economic down times. Americans fret: who will next direct the Empire and the major institutions that manipulate the World Economy.
Alongside these tales of people protesting against state policies or getting victimized by the caprices of capitalism, we witness daily scenes of US soldiers and civilians dying in Afghanistan – and still in the Iraq that the US occupiers dis-intergated – or of US drones whacking people in Pakistan or Yemen. Anti-war activists have not only protested regularly against Pentagon and CIA activities, in Washington, the gray areas of what US troops are doing in remote parts of the world and what economic interest lie behind the use of military force rarely get discussed.
Scholars and journalists have, however, dissected US military activities over the decades, but few writers have dared to try to take on the economic institutions, the crucial other pieces of modern US Empire – the one the military and CIA dirty tricksters try to protect and defend in every post World War II administration. So readers should avail themselves of Professors Leo Panitch’s — Political Science Professor at Toronto’s York University — and his colleague Sam Ginden’s excellent researching and insightful analysis, as well as their readable description and explanation of how the money part of the US empire works or doesn’t (The Making of Global Capitalism, The Political Economy of American Empire, Verso, 2012. ).
Those who have lived in ignorance of institutions like the Treasury Department, the IMF and Federal Reserve will discover in this book’s pages that these mysterious agencies play imperial roles that penetrate deeper into the world than the more publicized Pentagon and CIA.
During World War I, American finance and industry showed how US economic power, more than military strength, could relate to winning a world war.
US financial institutions also paved the path to US emergence as the world’s preeminent capitalist power, one whose reach extended to every area of the globe.
When World War II ended, with European powers ravaged, the United States became the logical leader of the “freedom” ideology, which had as a fundamental principle, the notion of market-driven capitalism.
After 1945, Washington made imperial changes in its Treasury and State Departments and expanded the powers of the Federal Reserve so as to elaborate a postwar policy that sought to secure the necessary global resources to empower the titans of industry and Wall Street, which needed the state to help accumulate world capital. In a sub chapter “Global Investment, American Rules, the authors quote Benjamin Cohen to portray how IMF-imposed structural adjustment provides immense benefits, citing economist Benjami Cohen to “large capital like big global-tradable goods producer, banks and other financial service firms, and large private asset holders.” Not exactly the shops on Main Street.
The US empire needed world-wide conditions that would lure foreign investment. Few people, even in the informed circles, know much about how Bilteral Investment Treaties work. How they integrate other countries into a US-directed and controlled global capitalism. Treaties like NAFTA and CAFTA for examples.
The authors also show how as the United States’ controlled financial institutions forced structural adjustment on poor countries to benefit large capital and suck more out of the working classes. Both Europe and Japan became part of what William Appleman Williams called America’s “informal empire”. The postwar growth of American finance—including the externalization of American practices and institutions—led to the creation of the integrated system of expanding financial markets that characterizes capitalist globalization. By the late 20th century, write Panitch and Gindin, “capitalists, literally almost everywhere, generally acknowledged a dependence on the U.S. for establishing, guaranteeing, and managing the global framework within which they could all accumulate.” This book reviews world economics that began with the US control of it in 1944 at the Bretton Wood meeting. The authors argue that an international class interest developed, that US officials possessed a vision of international capitalism in the post WWII period, one that pushed not so much for US special interests, but rather for the flourishing of capital itself, which needed vastly larger access to all parts of the globe. This, in turn, made possible the linkages that developed between large scale capital groups in the United States with international partners. As US forces tried to impose their military will in Korea and Vietnam, unsuccessfully, the financial arms of the empire convinced European capitalists to forge “ties with American capitalists both within Europe and within the US,” strengthening cross-border capitalist powers.
Panitch and Gindin make the case for the 1% class solidarity as they map the highway that led to “a truly global financial system based on the internationalization of the U.S. financial system.”
The downside of this organizing of big capital appeared in the 1990s, as global capital mobility induced a series of financial crises among low- and middle-income nations.
The authors, however, repudiate apocalyptic scenarios of capitalisms’ impending doom and instead offer suggestions about “turning the financial institutions that are the life-blood of global capitalism into public utilities” as a “necessary prerequisite for social justice and democracy.”
This level of discourse doesn’t exactly blend with Occupy slogans or the demands of Greek and Spanish workers, but serious activists will learn: these authors teach the how and why of the world’s capitalist economic system.
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