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Here is today's ZNet Commentary Delivery from Robin Hahnel.
Here then is today's ZNet Commentary...
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THE QUESTION OF IMPERIAL INTENT
By Robin Hahnel
Not so long ago the United States was widely viewed as having lost its
global economic hegemony. As far back as the early 1970s President Nixon
commissioned Peter Gary Peterson to head up a special commission to
evaluate why the US position in the global economy was deteriorating. The
commission's two-volume report published by the Government Printing Office
in 1971 contained a long list of ways in which the US was losing its
competitive edge to Europe and Japan. But most significantly, Peterson was
so impressed with the Japanese economic model that he added a special
appendix to the report titled "The Japanese Economic Miracle" in which
Peterson literally salivated over what he described as the competitive
advantages of different aspects of the Japanese economic system. He
explained how their lifetime employment system, their business
conglomerates, or Keritsu, (that included vertically integrated
manufacturing companies, a large commercial bank and an export trading
company,) their financial system (that permitted Japanese companies to
operate with much higher debt/equity ratios yet less risk of bankruptcy
than similar US companies,) and a highly efficient collaborative
relationship between Japanese businesses, the Ministry of International
Trade and Industry and the Bank of Japan (that facilitated long run
international economic planning to penetrate and capture important world
markets,) all provided Japanese companies with significant advantages over
their US counterparts. In 1974 the British economist Andrew Schonfield
published Modern Capitalism (Oxford University Press), a major
intellectual tour de force in which he explained that there had always
been two, not one, model of "capitalism." Besides the laissez faire model
favored in Great Britain and the US in which the government was viewed as
a policeman mediating conflicts between private parties, Schonfield
convincingly demonstrated that there had always been a corporatist model
favored, for example, in France and Germany, where the government was
viewed as a major player responsible for coordinating the economy and
shaping its pattern of industrial evolution. Schonfield went on to provide
credible evidence for why he believed the corporatist model would prove
better suited than the laissez faire model to the challenges of global
competition in the late 20th and early 21st centuries. In the 1980s and
1990s South Korea, Taiwan, and other Asian countries imitated the Japanese
version of corporatist capitalism with great success, producing the highly
touted Asian economic miracle. And despite the fact that IMF, World Bank,
and US officials labored tirelessly to perpetuate the myth that the Asian
"tigers" were laissez faire success stories, the evidence is overwhelming
that successful Asian economies during this period in fact pursued a
corporatist, not a laissez faire strategy. [See Robert Wade, Governing the
Market: Economic Theory and the Role of Government in East Asian
Industrialization (Princeton University Press, 1990), and Alice Amsden,
Asian's Next Giant: South Korea and Late Industrialization (Oxford
University Press, 1989)]
There is no denying that the Asian economic crisis has taken the wind out
of the sails not only of "Japan Inc.," but of other Asian "tigers" as
well, which prior to 1997 posed strong challenges to US and European
global economic supremacy. And the corporatist model is clearly in retreat
in Germany and France as well. Whereas the collapse of the Soviet Union
changed the world from a bipolar to a unipolar system of military power,
the Asian financial crisis has changed the world from a tripolar into an
increasingly unipolar system of economic power. It is interesting to ask
if US/IMF sponsored policies leading up to the crisis, and policies
imposed on stricken economies by the US and IMF after the crisis struck
were: (1) part of a conscious strategy to clip the wings of increasingly
troublesome economic competitors, (2) the accidental result of myopic
ideological zealotry and opportunistic greed, or, (3) indeed, the best
policies to strengthen East Asian economies that were really only "paper
tigers" and transform them into more formidable global competitors. I will
not bother here to present the case against the Wall Street/Washington
consensus that liberalization followed by austerity was all about
strengthening our East Asian competitors. Instead, let's consider whether
US imperial competition as the millenium approaches is (1) relatively
self-aware, or (2) merely unconsciously self-serving.
Chalmers Johnson is President of the Japan Policy Research Institute in
San Diego. He offered a blunt assessment titled "America's Free Trade
Proselytizing is the True Root of What is Now a Global Crisis" in the Los
Angeles Times (6/25/99). "After all the endless mouthing off in the pages
of the English-language business press about East Asian's 'crony
capitalism,' the lack of 'transparency' in Asian stock exchanges, the 'no
pain, no gain' logic of the IMF and how the Asian economic challenge to
Anglo American capitalism had fizzled, we now know that none of these
things had anything to do with the Asian - now global - economic crisis.
Addressing what did cause the crisis is the main business of the leaders
of the countries of East Asia as they reflect on what has happened to them
over the past two years. Here's the new explanation as it is developing in
seminar rooms from Seoul to Kuala Lumpur to Beijing. With the end of the
Cold War, the United States decided it had to launch a rollback operation
in East Asia if it was to maintain its global hegemony. The high-growth
economies of East Asia had become the main challengers to American power
in the region, and it was time they were brought to heel."
"The campaign worked in two phases. First, a major ideological barrage was
launched to soften up the Asians. The Americans mobilized famous
professors of economics from their universities, who never once faced a
'market force' in their own lives, to preach the beauties of
globalization; in this case meaning American economic institutions. These
include total laissez faire, destruction of unions and social safety nets,
staffing of regulatory agencies with retired financiers, indifference to
the pay differentials between CEOs and the ordinary work force, moving
manufacturing to low-wage areas regardless of the social costs, and
totally unregulated flows of capital in and out of any and all economies.
Ever since the Asian Pacific Economic Cooperation summit in 1993, the
Americans hammered home to the Asians that they needed to 'open up' their
economies in these ways. Then came phase two. Once the Asian economies had
begun to 'deregulate' and were standing in the world marketplace more or
less naked, the 'hedge funds' were let loose on them. These funds are
actually huge concentrations of capital owned by very wealthy Western
white men, who manipulate bewilderingly complex financial instruments
called 'derivatives.' They usually locate their offices in offshore tax
havens like the Cayman Islands and do everything in their power to avoid
regulators or tax collectors in the so-called free market democracies. The
funds easily raped Thailand, Indonesia and South Korea and then turned the
shivering survivors over to the IMF, not to help the victims but to ensure
that no Western bank was stuck with 'nonperforming' loans in the
devastated countries."
Obviously Chalmers Johnson is inclined toward a straightforward conspiracy
theory. Muthiah Alagappa, a Malaysian scholar at the East-West Center in
Honolulu is a little more polite: "The Asian crisis obviously strengthens
the position of American companies in Asia." Jusuf Wanandi, head of a
research institute in Jakarta is more alarmed: "All our stocks and
companies are dirt-cheap. Foreigners may take over everything." While
Prime Minister Mahathir Mohamad of Malaysia sounded the alarm in a
televised address: "If we are not careful we will be recolonized."
Nicholas Kristof who covered the Asian crisis for the New York Times is
more agnostic but does not dismiss the conspiracy theory outright: "Many
experts believe that one of the most far-reaching consequences of the
Asian financial crisis will be a greatly expanded American business
presence in Asia. The United States insists that the main beneficiaries of
open markets will be local residents, and the US is not a predatory beast
forcing its companies on Asia. But not everyone agrees. There is a growing
backlash against what some nations regard as an American model of laissez
faire capitalism, which rescues Connecticut hedge funds but sacrifices
Indonesian children."
Jeffrey Garten, now dean of the Yale School of Management, leaves no doubt
that the conditions that gave rise to American business ascendance in Asia
were not themselves, unplanned or accidental. He recalled that when he was
a high ranking official in the Commerce Department and key member of the
neoliberal "attack" team: "We pushed full steam ahead on all areas of
liberalization, including financial. I never went on a trip when my brief
didn't include either advice or congratulations on liberalization. Wall
Street was delighted that the broad trade agenda now included financial
services. There wasn't a fiber in the bodies of Mr. Rubin, Mr. Kantor, and
the late Commerce Secretary Ron Brown - or in mine - that didn't want to
press as a matter of policy for more open markets wherever you could make
it happen."
In many respects it matters little if the likes of Robert Rubin, Lawrence
Summers, Stanley Fischer, and Alan Greenspan really know and understand
what the effects will be of what they are doing. Nor does it matter much
if mouthpieces like Bill Clinton, Tony Blair and Gerhard Schroeder believe
their own rhetoric that liberalization and austerity is necessary to
strengthen Asian economies, or know full well that the international
economic policies they peddle weaken Asian competitors. The only thing
that really matters is that we who oppose US corporate sponsored
globalization understand that it not only is damaging the environment and
aggravating global inequalities, it has also dealt US corporations most
dangerous competitors in Asia a stunning body blow while handing US
financial institutions and investors a gargantuan windfall gain. But just
as the Pentagon Papers revealed a greater degree of self-awareness than
most had suspected on the part of those who planned and carried out the US
war against Vietnam, I believe as evidence trickles in from leaked
Treasury Department and IMF memos we will also discover a greater degree
of self-awareness on the part of those who orchestrated neoliberal
globalization than most suspect at present. Speaking for myself, I am more
convinced than I was a year ago that top policy makers believe very little
of their own rhetoric about liberalization strengthening all economies and
globalization raising the living standards of all, and are keenly aware of
how their international economic policies have weakened international
rivals of US business as well as aggravated global inequalities.
A<>E<>R
~~~~~~~~~~~~~~~
The only real voyage of discovery consists not in seeking
new landscapes but in having new eyes. -Marcel Proust
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A merely fallen enemy may rise again, but the reconciled
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German Writer (1759-1805)
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