Defining Black Leadership
Politics & Terrorism
Why Bush Wants War
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By Michael D. Roberts |
To be sure the recurring scandals and the Stock Market's undulating jitters must signal the end of an era. Indeed, while economic spin doctors float the line that investor confidence is down and that the Bush Administration must do something to address the situation, they conveniently leave out of their analyses the fact that corporate hanky-panky has been accompanied by massive layoffs in the U.S. manufacturing sector that is the backbone of its export business. In fact, the intervention by the government due to national disillusionment with the trend of U.S. capitalism signals a new and qualitative development.
It used to be that the sacredness of the market and its ability to self-regulate and design order out of chaos was one of the foundations upon which the system of U.S capitalism was built. The United States has historically adopted a hands-off approach to the holy market that is perceived as a self-governing, self-assembling entity that is based on the free exchange of information, goods and services. Successive United States economists and zealots for market development forces over controlled, central planning, have elevated the alleged advantage of the "free" market based one these sacred truths.
Years ago progressive economists warned about the frequency of contractions in the capitalist market and system, and the potential for recurring crises. "Cyclical crises" they called them. They also said that economic recessions, that is "slow economic activity and growth," would become more and more frequent and cute; last much longer as monopolies the anti-thesis of laissez faire capitalism continued to divide up the world into great uncontested markets for their own purposes. In the early 1990s the U.S. cry of globalization, privatization, and freeing up of local and regional markets reverberated throughout the world. The vehicle for this new economic Nirvana was, of course, the Internet.
Advocates for this "New Economy" closed their eyes to the mounting failures as banks embarked on the largest spending binge in U.S. history funding all manner of start up dotcom businesses, with little financial guarantees, in the mistaken belief that the profits would eventually come tumbling in sometime in the near future. Large-scale borrowing by businesses, especially start-up dotcoms, reached unprecedented levels and would eventually result in the highest level of bankruptcies and business failures in recent U.S. history.
On the other hand, others ignored evidence that in technologically backward nations globalization and market regulation by privatization, and the removal of barriers to invasive trade regimes, simply were not working. Still, international financial organizations like the IMF and the World Bank propped up these untested and spurious theories of deregulation and self-regulation as they tacked on conditionalities to "investment" capital especially in the Third World that also carried with them issues of privatization and divesting of poorly functioning state assets.
All this came back to roost in American capitalism as the dotcom industry came crashing down and the so-called "new economy" never got off to a great start. Banks were left holding the empty bag and insurance companies soon found themselves in a bind. A market that was predicated on unbelievable greed and narcissism of its players soon placed in real jeopardy the futures of thousands of American workers. Amidst these problems and strident calls for the government to intervene, the United States government became more and more involved in the many processes of capitalism banking, stock dealings and insurance than it has been in the past decade.
Today the very nature of the market has been transformed and reorganized with government, for the first time, exerting an oversight authority after eschewing earlier this year the temptation to become "big government," an accusation that the Republican Party has always leveled at the Democrats. And still the Bush Administration fails, despite its apparently gallant efforts, to bring some regulation to the U.S. economy that is based on private ownership of the means of production.
The reason is simple. The Administration has inherited the flawed dotcom revolution from the Clinton days and it does not know how to handle the problem. The thing is the dotcom revolution as conceived by the policy wonks in the Clinton Administration had very little to do with regulation, de-regulation and technology, precisely because the Internet is a large unregulated, sometimes chaotic network, that nobody owns and controls. Infact the Internet, while exhibiting organizational aspects of a typical capitalist market i.e. unregulated, random, and guided by what Adam Smith called "the invisible hand," it nonetheless is not owned by any individual, corporation or cartel. Therein lies a fundamental departure from classical U.S. capitalist theory the Internet cannot be regulated or deregulated to suit Tyco, Enron or Mobil.
So it must follow that the business of the Internet is all about new and innovative ways to do business. And while there are certainly great advantages to doing business on the Internet, this new economy, capitalist approach tried to build on the foundation that Internet traffic would ultimately result in profit as more and more people "visit" a company's website. But it is precisely the millions of choices that are to be found on the Internet that has debunked the capitalist myth of controllable niche markets on the Internet. In reality there is no such thing. And so this dotcom crash has ironically helped to undermine the very foundations of U.S. capitalism.
Finally, the capitalist credo that privatization was a neo-economic miracle, especially for Third World nations, has backfired. Even in industrially advanced nations of the west privatization has not really worked. I believe that it is the premise on which privatization is built that is flawed. It rests on the assumption that a transfer of state assets the list is as mixed and endless as can be imagined with health, electricity, education and customs tossed in to elements within the private sector would make these stressed operations not only turn over a profit, but work more efficiently. A leaner and meaner machine they said.
Inherent in this privatization theory was the built in belief that a more aggressive, organized and profit-driven private sector would use its pricing apparatus to regulate, plan and deliver quality services to the populace. Accompanying this theory was that higher market prices would be the foundation on which these services would be delivered. In the United States the best example of privatization's failure was and is the present mess that the California electricity service remains in and the gazillion attempts made to fix it that have all been to no avail.
So as privatization imploded and markets continued to dance an uncertain jig the sub-culture of parasitic, greedy and selfish overachievers who paid themselves obscene salaries even as the companies they were hired to develop were going belly up, reflected that basic flaw in the system of capitalism. For no matter how one slices it, dices it, or organizes it, when social production clashes with private ownership there must be friction. The bottom line is that millions of workers labor in social production of goods and services and the profits (the value of their surplus labor) is stolen by a tiny group of people who have proven that they can get away with corporate piracy and live like kings after their companies have crashed.
A former editor of the Carib News, Mike Roberts is one of the leading Caribbean born journalist in North America. Currently a columnist for a number of niche papers, Mike has joined the staff of The caribbean Voice as an editorial columnist and features writer.