Force In Our Economy

What makes up our state-capitalist economy?
In addition to international debt, inflation and the other usual suspects, there is another key dynamic: Force.

In “Anarchism: Arguments for and Against,” Albert Meltzer addressed this issue, considering it part of “The Money Myth.” To Meltzer, rather than money having some inherent value, its value “is dependent on the strength of the State.” “When Governments collapse, their money is worthless.” This explains in part why America, and other powerful countries, may benefit from having satellite states around the world, either allies or what are sometimes called “dependencies ” (places that are often made dependent).  International trade in general has functioned like this.   So, with this in mind, we should be wary of those who discuss economics like it’s some kind of natural science (a very common mistake), especially if we keep in mind one of “the great commandments of science” as stated by Carl Sagan: “Mistrust arguments from authority.” And what is money but an extension of authority?
Governments, even “Constitutional Republics,” do countless terrible things precisely because they wield political and economic power. In contrast, rebellion against naked economic power has frequently enlightened human society throughout history, making it somewhat freer and more egalitarian.  Meltzer notes: “When the Kaiser’s Germany collapsed, Imperial marks were useless. When the Spanish Republic was defeated, the banks simply canceled the value of its money. The story is endless.” Each collapse left “power vacuums” which unfortunately were filled by other despotic tendencies, which meant further economic servitude.

But still, no matter how we deal with it, currency units will collapse where regimes are threatened.
As it stands now, economic threats tend to be against ordinary people; the working man, and the working woman. Part of the problem is social alienation, which is fed by the abstract nature of capital.
Rather than simply bartering goods and services individually or in groups, we are supposed to measure value in “legal tender.” If we produces and trades without legal coercion, elite control over economic activity (in whatever form) could easily be forfeited. Predictably, this is in many ways an ideological matter, with “legitimate discourse” about economics handed down to us from politicians, economic “think-tanks,” media giants and the like. The US embargo on the “Communist-ruled Island” of Cuba could easily be explained along ideological lines. As one report stated in 2000: “The sanctions, first imposed by executive directive and later made law by Congress, have been in place in varying degrees for nearly four decades; successive U.S. governments have said relations will never be normalized as long as Cuba maintains communist political and economic systems. Havana, and an increasing number of members of Congress, have called the policy irrational and pointed to ever-warmer U.S. relations with communist China, Vietnam and even North Korea.” Rational or not, they stay in place for ideological reasons, and because Cuba strives to be somewhat independent of US interests. It’s not because Cuba has been a dictatorship (consider, for example, US support of Saudi Arabia and former warm relations with Saddam Hussein). Perez Roque, a top Cuban official, reminded us that, at least in the year of the report, Venezuela considered the United States “an important market for its petroleum exports.” No doubt this consideration was reinforced by the sheer power the US government wields, and, of course, few if any victims of such power find voice in our mass media or in mainstream economic theory. (2)

It’s also instructive to look at Mexico. As another report stated: “Mexico, which during the Cold War seemed to delight in tweaking Washington’s nose by supporting Cuba, has since 1994 been linked to the United States and Canada through the North American Free Trade Agreement, and its economy is now very dependent on U.S.-bound exports.” So now “Mexican firms, rather than introducing their products directly (into Cuba), must triangulate to avoid the problem.” (3)

So we know, rather objectively, how there are strong links between ideology, economic sanctions, law, and military “interventions”— or the brute force lurking in the background. Government force by itself is ideological and, at least to many, objectionable. This was why, in 1933, the highly-decorated Major General Smedley Butler (USMC) came forward with the following words:
“I spent thirty- three years and four months in active military service as a member of this country’s most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism. I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service. I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912 ….I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.
During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents. “(4)

68 years later, speaking on similar events, a Newsweek writer wrote: “…the dispute isn’t about WMDs at all. It’s about something else entirely: who gets to sell — and buy — Iraqi oil, and what form of currency will be used to denominate the value of the sales. That decision, in turn, will help decide who controls Iraq, which, in turn, will represent yet another skirmish in a growing global economic conflict. We want a secular, American-influenced pan-ethnic entity of some kind to control the massive oil fields (Iraq’s vast but only real source of wealth). We want that entity to be permitted to sell the oil to whomever it wants, denominated in dollars. We want those revenues — which would quickly mount into the billions — to be funneled into the rebuilding of the country, essentially (at least initially) by American companies. Somewhere along the line, British, Australian and perhaps even Polish companies would get cut in. (Poland provided troops.) President Bush doesn’t dare sell the war as a job generator, but it may, in fact, produce more than a few.”
Of course, when Newsweek says “jobs” it primarily means “profits.”

However, as Ben Steverman reported in BusinessWeek, corporations attempt to make the best of economic collapse:
“A weak dollar may hurt U.S. prestige, but it actually helps key parts of [the] stock market. Many stocks, especially those of large-cap, international companies, get much of their profits from abroad. Paul Larson, equities strategist at Morningstar (MORN), points to companies like Colgate-Palmolive (CL) or Coca-Cola (KO) that, though headquartered in the U.S., rely heavily on foreign consumers.
It’s further explained that, “Benefiting from the dollar’s decline may be ‘hard resource companies’ like oil and metals companies…. That’s because the U.S. price of commodities rises along with the dollar. But the fact that dollars can buy fewer commodities also puts pressure on American consumers and other firms. It’s no coincidence that the U.S. dollar is hitting new lows just as oil prices hit new highs.”
Steverman quotes Marc Chandler, global head of currency strategy at “Brown Brothers Harriman” (the very “banking house” Butler mentioned in 1933) as saying the dollar’s “decline has been orderly and fundamentally understandable.”

Countries rarely invade foreign or domestic populations without some definite material benefits in mind, just like individuals rarely break into someone’s house for the actual house (though governments do this relatively often). Meltzer explains that “Money is another form of rationing, by which one set of people get more than another. Wage struggles are fights to get a bigger slice of the cake. The wealthy are those who have first access to slicing the cake.”

1. Albert Meltzer. Anarchism: Arguments for and Against:
2. Karen DeYoung. “Top Cuban Official Says End of U.S. Embargo ‘Is Closer.'” Washington Post (Saturday, November 11, 2000; Page A02)
3. “U.S. Embargo Putting Mexican Firms Off Cuba” (January 5, 2005). Agencia EFE S.A.:
4. Butler, Common Sense [a socialist newspaper], 1935.
5. Howard Fineman, “In Round 2, It’s the Dollar vs. Euro,” Newsweek (April 23, 2003).
6. Ben Steverman, “The Dollar’s Decline: Opportunity Knocks,” BusinessWeek (September 13, 2007)

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: