by Thomas Reifer*
Global Shift: From the Atlantic to the Asia-Pacific
The end of the superpower confrontation between the US and USSR and with it the possibility of a global peace dividend opened up new possibilities for global peace, justice and security. Instead of redirecting monetary spending away from militarism and towards peace and social justice, the world saw instead the invasion of Panama, the Gulf War, the Balkan wars and Russia's war against Chechnya. Rather than utilizing funds freed from military budgets to address serious concerns about poverty and inequality, US budgets have hovered at near Cold War levels. And in the last few months, the new Bush administration has increasingly consolidated a historic shift in US global military policy away from a European Atlantic vision, instead placing the Asia-Pacific region and especially China at the heart of US military planning. Fears are beginning to be raised about the eventual prospects of a new Cold War, despite the continued movement on plans to integrate China into the structures of the world-economy. Along with the dubbing of China as a strategic competitor, the Bush administration, instead of supporting the Korean peace process, has thrown cold water on efforts at Korean reconciliation and reunification. Simultaneously, the Bush administration has been pushing Boeing's bid to sell $4 billion worth of jet fighters to South Korea (FEER, 7/5/01: 16-20; OAT, 2001).
A New Marshall Plan for the Asia-Pacific
Fittingly, despite the damage caused by the Asian economic crisis, helped along
by the IMF and the US Treasury, today's Marshall Plans are not programs of economic
reconstruction but instead plans for global shifts in US military posture. And
the target is not Europe, but Asia. The latest review of Pentagon policy has
been overseen by Andrew W. Marshall, the 79 year old former RAND analyst who
has long headed the Pentagon's Office of Net Assessment (see also BW, 2001).
The new report clearly targets China as the object of US military moves in the
Pacific. Indeed, at a press conference on Asia-Pacific security policy at Taiwan's
National Legislature early this June, I was told by a very hawkish Democratic
Progressive Party legislator, Parris Chang, who had accompanied President Chen
Shui-Bian on his recent trip to the US, that Andrew Marshall had correctly identified
China as an expansionist enemy unwilling to enter into any arms control agreements.
The description was reminiscent of US accounts of the USSR at the height of
the Cold War.
Cold War Threats or Self-fulfilling Prophecies?: Pentagon's Top
Military Official in the Asia-Pacific Critique's the Marshall Plan
The confidential Marshall plan review emphasizing new long-range US arms for
the Pacific has drawn some unusual criticism from high quarters; most significantly,
perhaps, from Admiral Dennis C. Blair, head of the US Pacific Command, which
last year held some 300 military exercises with some 37 countries in the region
(NYT, 5/17/01: A8). While supportive of the shift from Europe to Asia, Admiral
Blair was critical of the exaggeration of Chinese military capabilities. "I
think we have the tools to keep both air and naval power anywhere we want to
in the theater and can for some quite time…If you want to look at serious forces
designed to keep the U.S. out of part of the world, look at what the Russians
did in the 70's - dozens of submarines, hundreds of long-range bombers, dozens
of satellites, lots of practice….That was a serious system which we were going
to have a hard time fighting our way through. Nobody in Asia is even close to
that….The Chinese do not have an over-the-horizon target system that is capable
of hitting U.S. forces and there are many, many countermeasures to all of the
aspects of that kind of system which are available….I think that using this
projection of what the Chinese are now doing as a rationale for the U.S. have
to flow back out of Asia is just wrong. I think the forces we have can operate
there" (NYT, 5/17/01: A1, 8).
Many top security analysts indeed warn that treating the Chinese as a threat
may creating a self-fulfilling prophecy (Ball, 1999: 20; Forsberg, 2001). If
the top military officer in the Pacific is critical of the hawkishness of civilian
militarists, then how do we explain the forces driving US Cold War like policy?
Moreover, how does current US military policy relate to issues of economic globalization?
Anglo-American State-Corporate Globalization in Historical Perspective
One way of looking at the current wave of neoliberal globalization is to see
it as a return, in radically changed circumstances, to certain visions of a
global open door policy adumbrated by sections of the Anglo-American elite at
the turn of the century, a conception related to unique aspects of American
constitutionalism (see Boyle, 1999; see Nedelsky, 1990). This period saw the
rise of US vertically integrated corporations, the industrialization of war
and the related resurgence of high finance. At the time, elites turned increasingly
towards overseas expansion as a way to escape class conflict at home, while
propping up profits through military spending. Greater power projection capability
in turn facilitated the expansion of US state and corporate power abroad. The
late nineteenth century rise of the US navy thus provided for the growth of
US military and economic influence in the world and as a countercyclical economic
mechanism for the steel industry at one and the same time (see Smith, 1985,
Krause, 1992, Misa, 1995).
During this period great powers turned increasingly towards imperial expansion.
Public spending on the military boosted profits at home while securing raw materials
as well as exclusive markets for investments and exports abroad. Bondholders
granting loans for state militarization and arms makers garnered particular
benefits, just as in the militarized financial expansion of the 1980s. The end
result of the new combination of imperialism and increased interstate rivalry
at century's turn was the growth of revolutionary nationalism in the Third World
and eventually the global conflagration of World War I and II.
Putting the World-Economy Back Together Again
The most enlightened section of US elites were mindful of the space that interstate
rivalry had provided for radical anticolonial and anti-capitalist movements.
They thus sought to partially accommodate the rising social power of labor in
the core and anti-colonial movements in the Third World through a combination
of the spread of Fordist mass consumption, limited decolonization and "development."
The disintegration of world-economy and the shortage of dollars threatened this
reformist solution, strengthening left-leaning labor movements, anti-colonial
nationalism and with them the tendency towards regional economic blocs. Without
dollars to buy US goods, US elites feared Japan and Western Europe would turn
to soft-currency trading areas as well as other forms of economic nationalism
and socialism, prospectively locking the US out of the lucrative markets of
Asia and Europe, while tipping the global balance of power away from the US.
In the context of the waning of the British empire in the Middle East, the Chinese
communist revolution, the Soviet atomic explosion and upheaval in the colonial
world, US elites sought new plans to reconstruct the world-economy and interstate
system on the basis of multilateralism - the absence of barriers to trade, the
flow of foods and capital across national borders.
The problem was that the US Congress, at that time representing mostly local
or regional business interests, was not interested in the economic reconstruction
of the former enemies of the US for the benefit of multinational corporations.
Economic nationalism and fiscal conservatism limited the largesse available
for world-economic reconstruction. So how to put Humpty Dumpty, in this case
the world-economy, back together again? In this context, US elites increasingly
came to emphasize the need for military aid to fight communism as the way to
get appropriations out of Congress. NSC 68 - written by US Secretary of State,
former corporate lawyer Dean Acheson and his Director of Policy Planning, Dillon
Read investment banker Paul Nitze - outlined this entwined vision. As Acheson
related in his memoirs, they foresaw the need for some $50 billion to ensure
their aims.
The Korean War Boom & US Global Power
The occasion for implementing US policy was the outbreak of the Korean War.
The Korean War boom was the critical period in the vast expansion of the "postwar"
world-economy. The Korean War was related in turn to what Bruce Cumings (1981:
117) once called the first act of postwar containment, "the US initiated
division of Korea into US and
Soviet zones of occupation in 1945 and the civil and revolutionary war that
followed (Cumings, 1981,1990)."
The subsequent attempt by US forces to conquer all of Korea, which brought hundreds
of thousands of Chinese into the conflict, was what led Congress to pass the
appropriations which ushered in the US permanent war economy, with the US military
budget going from over $10 billion in June 1950 to well over $50 billion in
December. Only a fraction of this money was actually for Korea. Here, the rise
of military spending and the overseas expansion of US state power and multinational
firms that came with it, provided for the incorporation of sectors of labor
and Third World elites as junior partners in US hegemony. At the same time,
these programs helped defeat labor's more ambitious postwar dreams of organizing
the South and achieving social democracy in the US, as anticommunism facilitated
the purge of huge numbers of progressive unions from the CIO. Similar developments
took place in Western Europe and Japan, while revolutionary nationalist movements
were also held back in the Third World.
Through schemes of offshore procurement, whereby the US used military money
to buy weapons and related supplies from Japan and Germany, the US was able
to reconstruct these states as the industrial workshops of Asia and Europe.
Moreover, the US purchase of primary goods from the former colonies of Europe
and Japan helped restore the neocolonial triangular trade patterns needed to
solve the dollar gap problem. This combination of power and plenty ensured that
Western Europe and Japan would not return to trading relations with their historic
trade partners, Eastern Europe and China.
Enemies & Allies in the US-led Global System
Through US-led global military alliances, the US ensured the containment of
its enemies and allies, the latter becoming semisovereign states. At the same
time, international military spending provided the forces for a global policy
of counterrevolutionary violence aimed at preserving an open door for US capital
and the subordinate integration of Third World economies as complements of the
advanced capitalist countries more generally. This emphasis on integrating Third
World areas as complements to the economic processes of the advanced capitalist
countries drove US policies of military intervention in underdeveloped areas.
The rationale was the communist threat; the reality was that independent nationalism,
local attempts to control resources, limit foreign direct investment and so
forth brought fervent opposition. The economic logic of reconstructing the capitalist
world-economy based on multilateralism thus always housed the concomitant anti-communist
security logic as well.
Global military spending (or Keynesianism) stimulated the world-economy while
providing for the expansion of US military and corporate power globally. The
exception to this was East Asia, where the US tolerated mercantilism and limitations
on US foreign direct investment as incentives to integrate the states of the
region into US hegemonic structures. In East Asia, what Jung-en Woo called a
"reverse open door," prevailed, as these states became dependent on
exports to the US market.
A Political Economy of US Postwar Policy
The US internalization of allied protection costs provided a permanent mechanism
for public subsidy of private profit via the Pentagon system, not to mention
global economies of scale for the US military-industrial complex. Military spending
served as the fount and matrix of US high-technology industry, the US global
military alliance system and originally for the "postwar" expansion
of the world-economy. The Cold War in Europe and Asia was thus as much an economic
strategy for reconstructing the capitalist world-economy under US leadership
as it was a military strategy oriented towards the maintenance of a favorable
balance of power. In reality, balance of payment, balance of trade and balance
of power considerations were inextricably linked.
Military aid stimulated the world-economy, ensured Western Europe and Japan
the necessary imports needed for economic recovery, guarded against the dangers
of socialism, communism and forms of economic nationalism and maintained healthy
markets for US exports at one and the same time. The deployment of US troops
overseas backed up by nuclear weapons was essential in this process, with military
needs providing the justification for Congressional appropriations. In reality
this money served to subsidize US exports, not to mention those of Western Europe,
Japan and eventually Taiwan and South Korea.
The Role of the IMF, World Bank & the National Security State
The IMF and World Bank came to play increasingly important roles in the global
system, ensuring that protectionsim, exchange controls, quotas, tariffs and
other forms of economic nationalism that might threaten the goal of capitalist
multilateralism were not enacted by either Third World or advanced capitalist
states.
When populist regimes supported forms of economic nationalism, the IMF would
often threaten to cut off credit. States in the Third World were forced t o
choose between embracing IMF austerity programs and providing the necessary
repression to enforce such policies; or, if state elites and popular sectors
resisted, they often fell victim to military coups, with national military forces
working many times in combination with the US National Security State, including
the intelligence services, US corporations and the Pentagon (see Payer, 1974;
see Korner, et al., 1986; see Pion-Berlin, 1989). The new dictatorships were
usually warmly welcomed back into the IMF-World Bank fold with generous credit
and aid given in exchange for positive action to attract private foreign direct
and portfolio investment from multinational firms (see Broad, 1988).
Vietnam, the Balance of Payments Crisis & the Retreat to Informal Empire
In US postwar planning, Southeast Asia was seen as essential in supporting the
revival of the Japanese workshop. This helped to drive US intervention in Indochina,
in conjunction with domestic and international political-economic considerations
arising from the emergence of the Cold War. Since the US was the global enforcer,
maintaining US credibility took on increasing importance in the Vietnam drama.
As with the mafia, if you are in the business of providing "protection,"
specializing in the use and control of violence, reputation is more than a passing
concern. The "security" logic of "international military Keynesianism"
increasingly came to overtake the economic logic. In addition, the US was becoming
increasingly dependent on commercial arm sales overseas. The need for continued
arms exports increasingly influenced US foreign policy (see Klare, 1984).
In 1968, the Vietnam Tet offensive dramatized the limits of US military power.
US global military commitments were also increasingly taking their toll on the
US balance of payments, despite attempts to pay for US forces through offset
agreements and commercial arms sales. Now, instead of a dollar gap, there was
a dollar glut (see Borden, 1989). The Eurodollar market in particular exercised
an increasing pressure on the dollar-gold standard (see Helleiner, 1994). The
earlier merger of power and plenty represented a fecund synthesis of violence,
profits and power. Now there was an increasing contradiction between the power
pursuits of the US state and the profit pursuits of US multinationals. The rise
of foreign direct investment overseas by US TNCs and their refusal to repatriate
profits back to the US led to the exponential increase of the Eurodollar market,
undermining the dollar's status as an international currency. This jeopardized
US powers of seignorage, the right to mint the coin of the realm (Helleiner,
1994).
Globalization, Financialization & Militarization in the 1970s
The Nixon doctrine and subsequent turn to floating exchange rates aimed to
reconcile this contradiction, albeit at a cost of the further militarization,
financialization and globalization of the organizational structures of the world-economy
(cf. Arrighi, 1994: 310-311). The new US doctrine of relying on air, naval power
and regional allies for a time reduced US military costs overseas, while recycling
petrodollars back to arms producers and the US Treasury, as US regional clients
went on an arms spending spree (see Klare, 1984). As Franz Schurman (1987) noted,
the US move into the Indian Ocean (after Britain's withdrawal from Diego Garcia)
and growing dependence on Middle Eastern oil (and petrodollars) exemplified
the globalization of US economic and military power. The move also signaled
the increased enmeshment of the US with the world-economy.
At the same time, higher costs of oil (with the OPEC price rise) also stimulated
new oil production in the US Sunbelt. Regional elites here formed an important
part of the rise of the New Right, which in conjunction with the right turn
of the US Establishment helped catapult Reagan to power (see Davis, 1986). The
event that proved decisive here was the fall of Iran, which as part of what
seemed a new wave of anti-imperialist revolutions as in Nicaragua, was the final
blow to Nixon's strategy of informal empire. The Gulf region had become an increasingly
strategic area for the maintenance of US profits and power, reflecting the increase
in foreign direct investment (FDI) by US multinationals more generally. The
accumulated valued of US FDI more than doubled from 1970-1978, going from $78
to $168 billion (Arrighi, 1994: 305). What's more, this increase in FDI was
matched by the growing importance of petrodollars for the US balance of payments,
commercial banking, the maintenance of US seignorage privileges and for the
health high-technology military industrial producers such as aerospace (see
Spiro, 1999).
The New Cold War, the Washington Consensus & the End of "Development"
The combination of the fall of Iran and the advance in Soviet military might
put an increased premium on new US interventionary capability to protect US
commercial and related geopolitical interests overseas. To deter the Soviets
from challenging US intervention, new tactical and strategic forces which could
be used to back up US troops in the field were developed. Tactical and strategic
nuclear weapons were designed to protect US military forces in areas where the
US was conventionally disadvantaged. New forces aimed to deter rivals from responding
in ways that might serve to check US intervention, something the revival of
Star Wars is undoubtedly aimed at today.
Reagan aimed to reverse US decline through regressively financed militarization,
providing for a marriage of Pentagon funded high-technology producers and financial
interests. This led to a temporary efflorescence of US hegemony, but at the
cost of increasing world-economic and politico-military instability, the gap
between rich and poor on a global scale and a growing US debt.
Central to these changes was that holders of mobile capital would not tolerate
the US spending money for power pursuits unless a new deal was struck, as the
inflationary effects of government spending had depreciated the value of their
monetary holdings in the 1960s and 1970s. Max Weber noted long ago that modern
western capitalism arose in the context of intense competition between states.
States competed for mobile capital, which dictated to them the conditions under
which it would assist them to power (see Arrighi, 1994: 11).
The vast militarized material expansion of world trade and production ushered
in with the Korean war boom had in fact generated huge amounts of surplus capital.
By the late 1960s, increased competition in the world-economy was decreasing
areas for profitable investment. As state competition heated up again, holders
of surplus capital - in the US and abroad - found outlets for their funds by
lending them to states paying high interest rates, contributing to a vast expansion
of financial activities in a financial expansion. The effect of this was to
increase the power of the global capital markets over states. The new Washington
Consensus reflected this cyclical resurgence of the power of finance capital.
Whereas earlier Republicans traditionally had been more fiscally conservative,
tilting to the high-tech sectors of the Air Force and the Navy, Democrats had
historically embraced expansionary fiscal policies. Reagan gave elites from
the corporate and state sector the best of both worlds. US military spending
doubled to $300 billion a year, funded by fantastically regressive means - borrowing
- instead of taxing corporate profits and the wealthy, as when quasi-New Deal
limitations on the power of money capital - such as interest rate caps - were
in effect.
The need to provide financing for the Vietnam war was what first forced a rise
in US interest rates to pay for borrowing. This move was critical in ushering
in the "money-market mutual fund revolution" as borrowers moved from
banks to the money market (Steinherr, 1998: 40, 383). The increase in intercapitalist
competition, the steady erosion of limits on the power of money capital, combined
with the mass tax revolt of the late 1970s and increased geopolitical instability,
helped to propel the rise of Reagan's New Right and the ascendancy of financial,
military-industrial and related energy firms in the global economy.
US entry into the competition for money on the capital markets in the context
of the Federal Reserve's turn towards high interest rates was crucial for financing
the new Cold War and in the cyclical resurgence of high finance but an unmitigated
disaster for the Third World. These states had borrowed money at variable interest
rates during the 1970s for purposes of "development." Indeed the 1970's
was the period when the Third World appeared to gain ground on the political,
economic and military fronts. In the 1980s, though, these gains were reversed,
as debt payments now flowed from South to North and terms of exchange and trade
turned dramatically against the Third World. Increasingly, the old ideology
of development would be discarded; now countries were expected to liberalize,
export and pay back debts. Regressively financed military expenditures once
again propped up US profits and power, while bringing much of the Third World
to its knees. And so we went from the age of statist "development"
and to the age of corporate-led neoliberal globalization.
The State-Corporate Nexus, the "Free Market" & the WTO
The new Cold War reinforced US elite dependence on militarization to deal with
entwined domestic, geopolitical and geoeconomic problems. In particular, military
subsidization of high-tech industry gives US corporations a great advantage
today in world markets. For individually and now through the WTO, the US can
impose sanctions against other countries that subsidize their industries, while
the US and other advanced capitalist countries provide subsidies to the corporate
sector through military spending, a form of militarized state capitalism. That
is why firms like Boeing, which epitomizes this state-corporate nexus, are firm
supporters of the WTO.
Free markets are to be imposed on others but never practiced by the wealthy
and powerful, who want state subsidies, monopolization of markets, corporate
bailouts and technology developed in the public sector handed over to private
hands for private profit. New enemies are needed to justify these forms of militarized
state capitalism, which in turn encourage an aggressive US military posture.
All this facilitates the continued project of containing US enemies and allies,
as the US attempts to limit the power and economic influence of regional groups
or states that might challenge the US (see Cumings, 1997).
Star Wars fulfills these functions, subsidizing the high-technology industry
that gives US firms advantages, while providing for strategic superiority to
protect US overseas investments, commercial interests and related alliances,
by threatening to limit damage to US and allied forces in the event of a US
preemptive attack during a crisis (cf. Rumsfeld, 6/28/01: A6). This facilitates
US domination of allied states and increases US global interventionary capability.
The US shifting of its global military presence towards Asia aims at ensuring
that this increasingly central area of the world-economy will remain locked
into the overlapping networks of US violence, profits and power.
One may wonder why all this is happening, since the Cold War is ostensibly over.
The problem is, the Cold War was in significant measure part of the centuries
old North-South conflict in which the countries of the South were to serve as
complements to the advanced capitalist economies of the core. Moreover, as noted
above, the existence of "enemies" allows for corporate subsidies through
military spending, limiting popular movements for democracy and incorporating
allied states within US global military alliances and US-dominated supranational
organizations and legal regimes, such as GATT, the WTO, the IMF and the World
Bank (cf. Boyle, 1999). This is why, even after the Cold War's ostensible end,
US policy continues, rooted as it is in domestic social structures and the powerful
global interests of those who dominate economic and state resources in the global
system today.
The New Faces of Power: The RAND Report, the Carlyle Group
& the Center for Security Policy
Finally, a few items may be of relevance in understanding the new era. A new
RAND report (2001) conducted for the Pentagon and close to administration thinking,
expresses worries about growing opposition to US troops and recommends shifting
US forces towards the Philippines, Guam, Southeast Asia and other countries
close to Taiwan, possibly including Vietnam. In terms of the US-Japan alliance,
the report (2001: 13) notes that the "most fundamental question…is whether
Japan will continue to rely on U.S. protection…." The report (2001: 15)
goes on to express concern about a rapprochement between China and Japan, which
it says would "deal a fatal blow to U.S. political and military influence
in East Asia." Similarly to the very beginnings of the West's violent entrance
into Asia, US policy in Asia today aims to use military superiority as a way
of ensuring that dense regional trade links supplement Western violence, profits
and power, rather that increase the autonomy of the Asian region.
The RAND report provides useful material on current administration thinking.
Zalmay Khalilzad, the lead author of the RAND study, headed President-elect
Bush's transition team at the Pentagon. Most recently, Khalilzad joined the
White House as a senior director of the National Security Council (BG, 2001).
Khalilzad earlier chaired a bipartisan commission on US foreign policy and national
security with Frank Carlucci - one time Deputy Director of the CIA former Secretary
of Defense under Reagan - which made recommendations for the incoming President.
Carlucci, who sits on roughly a dozen corporate boards, is Chair and managing
director of the Carlyle group, a $12 billion dollar private equity firm, with
extensive interests throughout the world, that is also now the 11th largest
military contractor in the US. Carlyle first made its major splash in high finance
when it facilitated the purchase of a sizeable chunk - some $590 million - of
Citicorp by Saudi Arabia's Prince Alwaleed after the Gulf War. The deal helped
Citicorp's shares soar, giving the Prince an estimated $8 billion profit (Times,
5/26/01).
The vast majority of Carlye's investments are in telecommunications and military
firms. Advisers and managers of the group include former President George Bush,
former Secretary of State and Treasury James Baker, former British Prime Minister
John Major, former President of the German central bank Karl Otto Pohl, and
a host of leading Asian statesmen (NYT, 3/5/01: A1, 14; WSJ, 5/4/01: A1, 8).
A recent addition to Carlyle's managing directors in May was Afsaneh Beschloss
from the World Bank. At the Bank, Beschloss directed the investment strategy
for the Bank's $65 billion in assets, along with its $30 billion for funding
and operations. Earlier, Beschloss managed the Bank's derivatives and structured
products, as well as energy and infrastructure projects. Before joining the
Bank, Beschloss was with JP Morgan in London and New York, dealing with corporate
finance, as well as the Shell International Planning Group (PR Newswire Association,
Inc., 4/18/01).
Carlucci is also a former wrestling team member of Secretary of Defense Rumsfeld
at Princeton. Rumsfeld, long a supporter of Star Wars like programs, was the
winner of a 1998 Keepers of the Flame Award from the Center for Security Policy
(CSP), an influential advocate of such programs. The CSP, headed by Frank J.
Gaffney, Jr., has eight persons from military contractors on its board - six
from Lockheed Martin - and at least 20-35 percent of its annual budget, which
stands at $1.2 million dollar, comes from military contractors, which gave $49
billion in campaign contributions to politicians in Washington in the 1990s
(NYT, 6/13/00, A6; FT, 712/01: A6). Similarly, the President of the US Committee
to Expand NATO, was headed by the director of strategic planning for Lockheed
Martin, the world's largest arms manufacturer (NYT, 6/29/97, A1, 14).
The Need for Alternative Visions & Social Movements
Addressing the growing polarization and increasing insecurity caused by state-corporate neoliberal globalization necessitates addressing the relationship between "economic" and "political-military" aspects of globalization. Alternative visions of the future must be rooted in broad social movements seeking to challenge the state-corporate nexus. The roughly $800 billion dollars a year spent on military must be redirected towards social justice and alternative security arrangements which provide for greater participatory democracy and real security in terms of basic human needs for health, education, human services and protection from violence and instability. The structural opportunity for uniting the peace, social justice and labor movements that opened up with the end of superpower confrontation still remain to be grasped. Critically important will be to ensure that new social movements and labor break down the Berlin Walls that prevented international solidarity during the Cold War. The globalization movement must resist demonizing "enemies" and instead come up with a project to address persons in what is now a Global South (see Bello & Mittal, 2001). The time is now.
*Dr. Thomas Reifer is a Senior Research Associate at Focus on the Global South. He is also a Senior Scholar at the Institute for Research on World-Systems at the University of California, Riverside, where he will also be a Professor in the Sociology Department starting in 2002.
Endnotes
i) I have drawn on a wide range of sources for this brief review of US policy,
in particular on Borden, 1984, as well as the work of Noam Chomsky and Daniel
Ellsberg.
ii)Both President Bush and Secretary of State Powell have pushed Boeing's bid
over the last few months. A lawmaker with South Korea's ruling party, reported
being lobbied by Boeing executives accompanying leading Senate and House lawmakers
and later at a dinner hosted by the US Ambassador to Korea, noting "The
Boeing people came with the politicians. I was very surprised" (FEER, 7/5/01:
17). Boeing, whose overseas exports reach over $50 billion annually, is the
largest exporter in the US. Jeffery Garten, who served as Undersecretary of
Commerce helping US industry abroad, noted the following about Boeing in 1996
after the announced merger with McDonnell Douglas: "It will now be supporting
jobs in every state-from California to Missouri. And so you have to think that
its desires for the direction of American foreign policy will become more influential
than ever" (NYT, 12/17/96: D1, 4).
iii) This is not to save that states like the US weren't highly protectionist.
The US, has in fact never been in favor of free trade, contrary to popular mythology.
iv) Additionally, in the 1970s the IMF played a critical role in the emergence
of neoliberalism in England, paving the way for Thatcherism and Reaganism, though
this remains largely forgotten. For a review of these developments in global
finance, see Helleiner, 1994.
v) On the Washington Consensus, see Williamson, 1999, as well as the various
references in Bello, Bullard & Malhotra, 2000.
Recent studies, drawing on Fernand Braudel, have demonstrated the ways in which
new blocs of business and governmental organizations have come together under
the leadership of a hegemonic power and promoted material expansions of world
trade and production (see Arrighi, 1994; see Arrighi & Silver, et al., 1999).
The material expansion of the world-economy beginning with the Korean War boom
exemplifies the first part of this cycle of accumulation. When these material
expansions have reached their limits due to an overaccumulation of capital beyond
the bounds of profitable investment and related reasons, there is a shift towards
the expansion of finance. As intercapitalist competition rises, it eventually
translates into increased interstate competition, including for mobile capital.
This puts winds in the sails of the financial expansion, as holders of surplus
capital fund militarized interstate competition (and merger movements), as in
the late 19th and late 20th century, which in turn exponentially increases the
size of the global capital markets.
vi) In the past, financial expansions have been periods of the restructuring
of the global landscape of capital accumulation and interstate system that accompanies
hegemonic transitions. Historically, these periods have seen fundamental organizational
revolutions in the strategies and structures of accumulation pioneered by the
rising hegemonic power. In the past, these periods have seen the existing hegemonic
power decline and new blocs of business and governmental organizations come
together under the auspices of a new hegemonic power. The turn towards finance
acted to preserve for a time the existing hegemonic power in the global system,
but by increasing the contradictions that eventually led to its demise and the
rise of a new power. The current crisis of neoliberalism would seem to exemplify
this pattern, though there are reasons to be cautious about these historical
analogies. Most importantly, perhaps, in the past, hegemonic transitions have
occurred through global wars, these providing for the transfer and concentration
of capital, productive power and means of violence necessary for the emergence
of a new hegemonic power. Replaying such a scenario now, of course, is an entirely
different problem given the rise of weapons of mass destruction. See also Arrighi,
Hui, Ray & Reifer, 1999 & related references in Arrighi & Silver,
et al, 1999.
vii) See Boeing's own website on the WTO at http://www.boeing.com/news/feature/wto/index.html
viii)For the report, go to http://www.dni.net/FCS_Folder/Rand_Rpt_for_new_President.pdf.
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