In these times of capitalist crisis, the decadence is not a simple linear process. The development of economic theories is not over yet, and the stock of existing theories is already considerable well inside the capitalist corral.
Those theories can, roughly, be divided between free market without rules (also known as anarco-capitalism) and and market based on rules. The total absence of rules to control markets is based on the axiom that a free market, if left alone, will solve all problems of society. In so doing, the proponent theorists cut the umbilical chord between economy and science. That is, the all- important Political Economy has been left derelict at sea. This means that the liaison between Economy and the Social Sciences was cut off, and as a consequence these 'neoliberal theories', based as they are on a single unprovable axiom, can easily be compared to a religion, rather to a science.
But the neoliberal economy has atributes very attractive to some people and institutions, because it accelerates the rate of profit, albeit at the cost of growing income inequalities. So, the use of neoliberalism by western governments attacked aggressively the middle classes and the workers, and in the same process of maximizing profit at all costs sent their industries to Asia, mainly. The west was left with financial witchcraft that produces profits simply because the reality of those profits was enforced by laws that challenged the very foundations of economic reality. Wealth is measured by bits and bytes in a bank's computer, and not in concrete production of wealth. We can never forget that wealth is always material, like shoes, bikes, houses, etc. Accepting bits in a bank as wealth requires laws that are always mutable, while material wealth, like gold, doesn't need any mutable and fragile covenant.
The neoliberal dominance in the west created immensely powerful oligarchies, and at the same time transformed the wealth of the west into a wisp or bits and bytes.
But not all countries in the world fell into that trap. The most powerful examples are China and Russia. They understand that riches are material, and proceeded to organize their economies accordingly. The example of China is dramatic. If anyone in the world wants to buy something, 9 out of 10 times it was made in China. Russia has greater security issues, and military production still successfuly dominates the scenario.
China is in the centre of a giant web of commerce and corresponding logistics. Part of this web is the BRICS group, now in implementation of their own currency, bypassing the US dollar.
At this moment, the US treasury finds it difficult to sell treasury bonds, just because the credibility of the US economy is in great doubt. As bonds represent loans to US, the Fed is obliged to print money to keep private banks afloat. But printing money generates inflation, and perhaps even hyperinflation.
The final result is that the banking system of the west is crumbling, and when the final consequences are present, a chaotic crisis will be installed.
This is the picture of the west in crisis. And what about China and Russia? There is a clear divide between East and West, and it is necessary to ask some questions to clarify this division.
When it became clear that the Chinese economy threatened the US supremacy in world affairs, a range of options were on the menu of the US and the West at large. The most obvious is a partnership for growth. Together, US and China could be the giant engine capable to wipe poverty from the planet. But, unfortunately, the West chose confrontation. There is a doctrine in the US saying that nobody can dispute the US supremacy achieved after the 2nd WW. The ghost of Bretton Woods is still on the way of realism.
So, a confrontation came to be, as we know. There is a line of fire in geography where the tectonic plates of West and East shock. At present, Ukraine and Palestine are the two visible volcanoes. But no one can say how many volcanoes will exist in a few years, once the conflict goes ahead. The line of fire is long in time and space.
While this conflict goes on, the economies of the West and of the East follow divergent ways. So, the line of fire is movable not only because of the geopolitical significance of a place, but also because the correlation of forces between East and West changes every day.
In choosing confrontation, the West started relying on their military. This can be seen both in Ukraine and Palestine. The West feeds military material both to Ukraine and Israel. Dependent as they are on American money, both Ukraine and Israel are artificial constructs surrounded by hostile reality on all sides.
This confrontation is general and deep enough to be considered a war. And in war there are winning ans losing strategies on every side. Since Sun Tzu and von Clausewitz
war is won with the use of brains rather than arms. And the western brains have been failing miserably in this confrontation. This can be, perhaps, part of the general decline of the West, but caution demands to leave room to other causes.
A good brain sees reality, recognizes it and acts upon it. A not so good brain has a lot of room for fantasy encroaching reality. Relying in the glory days of Bretton Woods is just another way to go to Disneyland. And here is a good description of the conflict.
Bretton Woods is dead wood, and trying to ressuscitate it is ridiculous. The reality today is a power that produces real wealth for the world and, on the other side, a power that has to buy those goods to survive. This last power is wasting resources in wars that cannot be won and will not be won. The justification for this is made of empty words like MAKE AMERICA GREAT AGAIN. Will America be greater if thousands of coffins arrive all the time in Arlington Cemetery?
Capitalism is finally face to face with its genetic contradictions, as by Karl Marx, whose philosophical, economical and political work is still to be surpassed, given the poverty of serious thinking prevalent during the unabashed dominion of the markets on everybody's lives.
The historic changes of today are not yet the marxian revolution that would install socialism. But these changes deal a fatal blow to colonialism and imperialism, another by product of the class struggle.
Serious commentarists say that the American People will do what they are told when the inequality problems of the US bite the hardest. This image of of passivity would put Americans outside the mainstream of human behaviour, and that is why I do not believe it. There is a lot of curiosity in the Global South about this subject. Will Americans recognize the venom and neutralize it?
At this moment the internal situation of the US is the trickiest enigma. I believe that the forces who did the American Revolutions in 1776 are very much alive. And even possibly sharper in its cutting power.
This is an emergency.
Comments