The War and the Global Economic Crisis
by Nat Weinstein
The tragic events that literally came crashing out of the blue sky on that workday morning of September 11 surprised and astounded the world as few such events have done before. Less surprising, however, was the hypocritical indignation mouthed by the political leaders of the worlds richest and most powerful imperialist nation as it declared war on its victims, the peoples of the poorest and weakest of the worlds most poverty-stricken countries.
But as we shall see, it is a war that cannot be won. Among other less tangible factors, there is little in the way of conventional armies to destroy, of infrastructure to decimate, of arsenals to blow apart and even of cities to level. Worse yet for American imperialism, it comes at a time when the world capitalist economy has been descending relentlessly toward a major economic crisis that is shaping up to be the deepest since the Great Depression of the 1930s.
It was accepted wisdom a little more than a year ago that America was the only engine driving a faltering global economy. It has since turned into its opposite. Moreover, unlike past wars that have served to stimulate faltering economies, this one at this moment in history precludes such a beneficial economic side effect. This is in large part because the American ruling class has sustained its unprecedented half-century of prosperity largely by maintaining a permanent war economy since shortly after World War II. Thus, trillions of dollars have been spent over the last fifty years for the construction of an arsenal of weapons of mass destruction greater than that of the rest of the world combined.
But how many more nuclear missiles, aircraft carriers, bombers, fighter planes, helicopters and tanks does America need to carry out this war? Certainly not significantly more of these death-dealing instruments will be needed now than have been produced in every peaceful year of the last half-century.
It is highly unlikely, however, that the American military superpower will be able to continue to suppress the worlds ever-more rebellious subject nations without a serious commitment of American troops on the ground. If and when such a commitment of ground troops becomes necessary, the casualty rate in what Bush has called the first world war of the twenty-first century, is likely to be on a scale such as was suffered by the American people in every war previous to its most recent wars in the Middle East and the Balkans.
The Vietnam syndrome and the War on Terrorism
Make no mistake: The Vietnam syndrome still haunts the American ruling class with the memory of massive mobilizations demanding, Bring our Troops Home Now! It still stands as a deadly warning to American and world imperialism that wars on the ground will cost many lives on both sides of any conflict.
The mass Vietnam antiwar demonstrations did more than threaten to destabilize American society at home; it sent a message to American troops that the American people were on their side. Thus, our young men, drafted into the armed forces or having enlisted, often just to get a job, knew that as citizen soldiers they could also speak out against the war. And they could do so not merely because of their rights under American law, but also with the assurance that they had the support and protection of the great majority of the American people!
The Vietnam syndrome haunts Americas capitalist government because it understands all too well that wars that do not have the support of the people are very dangerous wars for any ruling class. And they also know that wars that do not have the support of the nations own troops constitute an antiwar force of revolutionary proportions.
Thus, in the last decade, American imperialism has successfully rained death and destruction from high in the sky on helpless civilian populations without having thousands of its own young men sent home in body bags. But the almost casualty-free victory over Iraqs Saddam Hussein and Yugoslavias Slobodan Milosevicdue to exceptionally favorable circumstances for American imperialismis not likely to be repeated in the world of the twenty-first century.
Even the richest country is not rich enough to win a war against a world in rebellion
Some of capitalisms most respected economic and political experts have raised serious questions over whether this War on Terrorism can be won by military means alone. They argue that force by itself will not be nearly enough and that the United States and other of the worlds advanced industrial countries must do whatever is necessary to alleviate the terrible poverty being suffered by peoples in the neo-colonial world of Africa, Asia and Latin America.
A few of these economic experts even doubt whether America is rich enough to make life a little better for those it exploits and oppresses and at the same time still have enough left to maintain an acceptable rate of profit for its capitalists and, at the same time, prevent the world from descending into a full-blown depression. These experts, moreover, acknowledge that the relentless intensification of the rate of exploitation of the peoples in the worlds poorest countries lies at the roots of the unfolding global economic and military crisis.
However, even those bourgeois economists that understand how sharpening capitalist economic competition excludes any voluntary reduction in the rate of exploitation by capitalists and their governments, continue to hope against hope that a way out of the fundamental contradictions of capitalism can somehow be found.
In any case, it is clear to most normally intelligent observers that President George W. Bushs arrogantly self-righteous speech about cowardly terrorists, better described the role of American imperialism than it does those who blew themselves up in a desperate and misconceived attempt to right the wrongs done them and their people.
The instinctive reaction to Bushs speech by a surprising number of ordinary people was to say that the United States could better combat terrorism by dropping food not bombs on the hungry people of Afghanistan.
The not-surprising reaction to this simple truth by spokespersons for the bipartisan US government was to show their contempt for the intelligence of ordinary people by announcing that Americas humanitarian bombers would begin dropping packets of food (not more than a days supply of food for one person) on the people of Afghanistanalong with the bombs! Food packets, moreover, that came wrapped in the same yellow coverings as the cluster bombs also dropped by US bombers.
Galbraith writes on The War Economy
Lets take a look at the analysis of todays combined global economic and military crisis made by James K. Galbraith, one of capitalisms more respected economists. In an essay he wrote, The War Economy, he came, as close to the truth as any defender of the profit system is able. And while he does not conclude that both the military and economic problems are intractable, such a conclusion is inescapable for any self-respecting scholarly bourgeois economist such as Mr. Galbraith.
His implied thesis is that, rich as the United States is, the amount of spending required to merely soften the impact of what he believes is likely to be an unusually prolonged recession, may be beyond American and world capitalisms capabilities. He is one of the few bourgeois socio-economic experts who argue that it is in the interest of saving global capitalism from itself that it will be necessary to improve the desperate economic condition of the peoples in the countries targeted by America in its global war on terrorism. He proposes that far larger amounts are needed than anyone in charge of government and ruling class policy has yet proposed.
Galbraith begins with an overall estimate of the combined military and economic crisis facing American and world capitalism from his viewpoint as a supporter of Americas global War on Terrorism.
He writes, We are facing what is not only a terror attack, but also an economic calamity. The impact of the strikes at the World Trade Center now includes a 14.4 percent drop in stock prices in the first week following the attack, and a collapse in those sectors related to travel and leisure, notably airlines, hotels, and resorts. As these events cascade through the economy, they will shatter fragile household balance sheets and precipitate steep cuts in consumer spending. The ensuing recession could be very deep and very long.
Galbraith goes on to detail the many contradictory factors in operation in the post-World War II global capitalist economy. Galbraith, like his more famous father before him, is well known as an essentially unreconstructed supporter of the economic theory of John Maynard Keynes.
Like virtually all other bourgeois economists, Galbraith gives full support to the rip off by capitalist politicians of trillions of dollars deducted from the wages of American workers and placed in a fund to finance Social Security. But he seeks to absolve himself of any responsibility for the capitalist governments trillion-dollar confiscation of the American working classs hard-earned savings accumulated over more than 60 years. This is how he supports the rip off and rationalizes his culpability in one sentence:
Shibboleths about the Social Security Trust Funds should not stand in the way of this simple and progressive measure [using Social Security funds to relieve the present economic crisis]: if Social Security contributes to relief of the present national crisis, then it is the governments solemn moral obligation [to do so, but] not to use that contribution as an excuse to cut benefits later. (Emphasis added.)
But he knows exactly why his warning not to cut benefits later will fall on deaf ears. He is well-enough versed in the methods of capitalist politicians to know that it would be far better for capitalists to remove the myth that these funds are still intact in government vaults now, so that when new taxes must be levied to pay Social Security benefits, they will put the burden of the tax on the same people who had been legally robbed of the trillions of dollars that the working class paid into the funds since the mid-1930s. That way, you see, the capitalists will tax those wage earners who still have jobs to pay benefits to those without jobs. And, we can be sure, they will also cut benefits on the grounds that there is no money in the Social Security fund!
Galbraith, of course, knows all this, but he also knows that capitalists are incapable of sacrificing their own interests even if it is the only way to save the profit system and their own power and privilege as a social class.
Galbraith foresees collapse of the dollar
Galbraith makes clear that he fears that a collapse of the dollar could easily result if the greatest care is not taken to prevent it. His fear is indicated by repeated warnings such as this one:
But even with this precaution [scheduled tax cuts for the rich], wartime monetary policy leads to a major contradiction: It is inconsistent with a stable dollar that is openly traded unless every other major power conducts policy in the same way. To finance either a major military or a major domestic economic effort, or both, on world capital markets could very well unhinge the dollar and shift the balance of financial powerpresumably to Europe.
And then to explain why this war cannot stimulate the economy and why there is the very real danger of a global financial collapse if the wrong kind of stimulus is employed, Galbraith writes:
Here, the analogy to World War II mobilization is misleading. After World War I, the United States was the worlds creditor nation and held a near-monopoly on the gold stock. With the collapse of world trade in the 1930s, global economic interdependencies receded sharply; meanwhile the United States in the late 1930s was energy self-sufficient and did not run a large trade deficit. None of these conditions now holds. In historical terms, the US position today much more closely resembles that of the Great Powers in Europe in 1914 than that of the United States in 1939. As a result, a high-order Keynesian response will have global financial repercussions.
Galbraiths passing reference to the present dependency by the US on large imports of oil underscores why there is a generalized awareness among those critical of US foreign policy that US capitalisms need for a stable supply of cheap oil is a key contributing factor in precipitating the so-called War on Terrorism.
Galbraith goes on to take up other measures that he believes might be viable but are likely to end in destabilizing the dollar. And he warns that these additional costs may result in An economy with high unemployment and high inflation [being] very possible, even likely He then points to what he thinks may be a possible way out:
With that bleak assessment of what lies ahead, he sums it all up with his two final cryptic sentences: If mass unemployment or inflation cannot be avoided by preemptive means, then the entire experience of the New Deal and the War Economy will have to be called upon in due course. But there is no point in going into all that now.
A new period in world history has begun
Now that global capitalism is headed for severe economic turmoil everywhere, workers and other of capitalisms victims, who will bear the brunt of the unfolding crisis, will be pushed onto the road to revolution as the crisis results in much more suffering for the already impoverished plebian masses in the neo-colonial world. Moreover, the powerful working classes in the strongholds of world imperialism will also suffer the effects of this global crisis impelling them too onto the road to revolution.
That means, for the first time in world history a veritable global pre-revolutionary objective situation will unfold in pace with the deepening economic and military crisis of world capitalism in both the advanced industrial countries and in the neo-colonial world. Then, world socialist revolution will no longer be only the long-term goal of what is now only a relative handful of revolutionary Marxists. The long-term goal of revolutionary Marxism will soon be on the order of the day, recognized and embraced by tens of millions and ultimately by the great majority of the human race.