Karl Marx Minus Marxism Equals Globalization
Karl Marx had it right. He predicted that science and technology are a force of production in their own right during the Industrial Revolution. There was another Industrial Revolution in the early part of the twentieth century. Then, the Information Revolution connected the world so that time and space shrunk with the click of the mouse. Now, with debt-driven vehicles, world civilization has become finance-driven. This development will be the last stage of U.S. world domination. As an imperial power, it rules not only by its military prowess but also by its control of the world banking and non-banking systems, pegged to the dollar. Although the dollar has weakened as a commodity against other currencies, it nonetheless is still the preferred means of conversion of currencies and gold of other nations of the world. The financial stability of world civilization pivots on the health of the U.S. economy. A deep recession in our country signifies depression in developing countries. Sub-Saharan Africa is not even part of this grid of power, which is none other than the monetarization of world power.
The contradiction in the global system is that the United States is a quasi-mercantile power, with its money earned through the liquid gold of oil and the securitization of assets, fundamentally protected by injections of liquidity by the Federal Reserve System and the U.S. Treasury. The United States has not modernized its manufacturing sector, writing it off as basically of secondary interest to national security and welfare; hence, it is no longer competitive. Manufacturing contributes little to the Gross Domestic Product. Credit (debt) drives our economy, particularly in the financial and mortgage domains. In a sense, there is negative equity. A nation can no longer remain great when it is basically importing more than exporting, particularly when the dollar is weakening. Unworthy institutions (such as trusts, hedge funds, mortgage companies, insurance companies, investment corporations) lent money to unworthy clients, whether individual or corporate. There was an unraveling of the economy when debtors could not repay. The securitization of debt has become the scandal of the American economy, as debt is packaged into tranches (for instance, interest payments on subprime loans) that are sold to unwary buyers. There have been large-scale defaults because of people obtaining loans for mortgages with no income, no job, and no assets. The concept has received the appropriate name "moral jeopardy." This term can be applied not only to individuals but to developing nations that had global ambitions to be players without ethical constraints. Innocent third parties will pay for the strategic mistakes of others, both lenders and borrowers. This democratization of wealth has led to negative equity. The underlying force is the meanest passion of greed.
The consequence is that the stimulus package of President Obama, signed on 17 February 2009, will have to be nationalized to bail out institutions that market forces would otherwise have creatively destroyed. Big Government will become the partner of Big Business. In essence, there is a contradiction in that government has to involve itself as the generator of bailout funds, and that entails massive borrowing from its citizens and foreign banks. In the long term, the borrowed moneys have to be returned through punitive taxation that could well destroy the preeminence of the United States in the world. Americans are spending more than they are producing. To count debt instruments and their creation as part of the Gross Domestic Product is not to the ultimate benefit of the common man. A massive redistribution of wealth to the rich continues unabated with the middle class sliding into a working-class status with uncertain future incomes and outcomes.
John Rawls advocated maximizing the minimum rewards to the most disadvantaged in society or the world. Marx can come to his assistance in this instance. The contradiction is that the U.S. economy, with its tax laws tilted toward the most advantaged, maximizes the gains of the rich by guaranteeing their profits and subsidizing their risks. More than ever before in the history of the country, the poor get poorer and the middle class is bloodied by increases in the burden of taxation, while their salaries stagnate. They work more hours per week than ever for less relative salary and benefits. In the current crisis, the value of their homes has been devalued with mortgages exceeding market prices. There is a crisis of liquidity. The purchasing power of the middle class has dwindled with no prospects in sight to recapture the self-respect of property owners from the good old postwar days through the Clinton presidency, despite President Obama’s stimulus package. The crash in the value of technology firms, the stock market meltdown, and the housing crisis can be magnified in terms of harm done internationally. Third and fourth world countries suffer disproportionately, mainly because of a lack of natural resources, IT networks, human capital, and democratic institutions to protect human and property rights. The industrial countries exploit weaker countries because their labor and natural resources are cheaper. The war in Iraq was not about weapons of mass destruction, but rather encompassed the ignominy of oil diplomacy, particularly as it affected the Bush dynasty and its wish to protect the source of its ill-gotten wealth in black gold.
There are other facets of globalization such as trading around the clock, an ecology movement concerned with global warming, animal rights advocacy, the human rights movement, and countless other worthwhile causes. Too, the issue of conflict resolution t has become global in nature. Any regional war can easily escalate into a world war because the United States has commitments and military alliances because of interlocking interests around the globe. The United States has stretched itself beyond its productive capacity so that its commitments could bankrupt it as seen in trade and budget deficits, and the devaluation of the dollar as global currency by competitors in the European Union, China, India, Brazil, and Japan. For example, Great Britain and the Netherlands, two former great powers, saw their power decline not because of military defeats, but because of decline in moral leadership in economics and politics, where the political class invested in conspicuous consumption, not modernization of the capital infrastructure to keep a competitive advantage. These two world players basically bankrupted themselves. Too, their imperial ventures cost more to maintain administratively than was monetarily profitable through naked exploitation.
The strong point of the U.S. economy is in information technology, in which it still maintains preeminence. Its very success in producing the technology will be its undoing in that other nations can appropriate it for their own use free of overhead and capital costs for research and development. The United States will be less strong in both the military and economic spheres of global competition, having lost advantageous access to market goods and services.