Who Rules the World? (11 page)

The two opening commentaries are on Israel-Palestine. The first, by two high Israeli officials, is entitled “The Problem Is Palestinian Rejectionism.” It asserts that the conflict cannot be resolved because Palestinians refuse to recognize Israel as a Jewish state—thereby conforming to standard diplomatic practice: states are recognized, but not privileged sectors within them.
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The demand for Palestinian recognition is hardly more than a new device to deter the threat of a political settlement that would undermine Israel’s expansionist goals.

The opposing position, defended by an American professor, is encapsulated by its heading: “The Problem Is the Occupation.”
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The subtitle of the article is “How the Occupation Is Destroying the Nation.” Which nation? Israel, of course. The paired articles appear on the cover under the heading “Israel Under Siege.”

The January/February 2012 issue features yet another call to bomb Iran before it is too late. Warning of “the dangers of deterrence,” the author suggests that “skeptics of military action fail to appreciate the true danger that a nuclear-armed Iran would pose to US interests in the Middle East and beyond. And their grim forecasts assume that the cure would be worse than the disease—that is, that the consequences of a US assault on Iran would be as bad as or worse than those of Iran achieving its nuclear ambitions. But that is a faulty assumption. The truth is that a military strike intended to destroy Iran’s nuclear program, if managed carefully, could spare the region and the world a very real threat and dramatically improve the long-term national security of the United States.”
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Others argue that the costs would be too high, and at the extreme some even point out that such an attack would violate international law—as does the stand of the moderates, who regularly deliver threats of violence, in violation of the UN Charter.

Let us review these dominant concerns in turn.

American decline is real, though the apocalyptic version of it reflects the familiar ruling-class perception that anything short of total control amounts to total disaster. Despite the piteous laments, the United States remains the world’s dominant power by a large margin, with no competitor in sight, and not only in the military dimension, in which, of course, the United States reigns supreme.

China and India have recorded rapid (though highly inegalitarian) growth, but remain very poor countries, with enormous internal problems not faced by the West. China is the world’s major manufacturing center, but largely as an assembly plant for the advanced industrial powers on its periphery and for Western multinationals. That is likely to change over time. Manufacturing regularly provides the basis for innovation, often even breakthroughs, as is now sometimes happening in China. One example that has impressed Western specialists is China’s takeover of the growing global solar panel market, not on the basis of cheap labor but by coordinated planning and, increasingly, innovation.

But the problems China faces are serious. Some are demographic, as reviewed in
Science
, the leading U.S. science weekly. Its study shows that mortality sharply decreased in China during the Maoist years, “mainly a result of economic development and improvements in education and health services, especially the public hygiene movement that resulted in a sharp drop in mortality from infectious diseases.” But this progress ended with the initiation of capitalist reforms thirty years ago, and the death rate has since increased.

Furthermore, China’s recent economic growth has relied substantially on a “demographic bonus,” a very large working-age population. “But the window for harvesting this bonus may close soon,” with a “profound impact on development.… Excess cheap labor supply, which is one of the major factors driving China’s economic miracle, will no longer be available.”
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Demography is only one of many serious problems ahead. And for India, the problems are even more severe.

Not all prominent voices foresee American decline. Among international media, there is none more serious and responsible than the
Financial Times
. It recently devoted a full page to the optimistic expectation that new technology for extracting North American fossil fuels might allow the United States to become energy independent, hence retaining its global hegemony for a century.
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There is no mention of the kind of world the United States would rule over in this happy event, but not for lack of evidence.

At about the same time, the International Energy Agency (IEA) reported that, with rapidly increasing carbon emissions from fossil fuel use, the limit of safety with regard to climate change will be reached by 2017 if the world continues on its present course. “The door is closing,” the IEA’s chief economist said, and very soon it “will be closed forever.”
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Shortly before that, the U.S. Department of Energy reported its annual carbon dioxide emissions figures, which “jumped by the biggest amount on record,” to a level higher than the worst-case scenario anticipated by the Intergovernmental Panel on Climate Change (IPCC).
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That came as no surprise to many scientists, including the Massachusetts Institute of Technology (MIT)’s program on climate change, which for years has warned that the IPCC’s predictions are too conservative.

Such critics of the IPCC predictions receive virtually no public attention, unlike the fringe climate change denialists who are supported by the corporate sector, along with huge propaganda campaigns that have driven many Americans off the international spectrum in their dismissal of the threats of climate change. Business support also translates directly into political power. Denialism is part of the catechism that must be intoned by Republican candidates in the farcical election campaigns now endlessly underway, and in Congress denialists are powerful enough to abort even efforts to inquire into the effects of global warming, let alone do anything serious about it.

In brief, American decline can perhaps be stemmed if we abandon hope for decent survival, a prospect that is all too real given the balance of forces in the world.

“LOSING” CHINA AND VIETNAM

Putting such unpleasant thoughts aside, a close look at American decline shows that China indeed plays a large role in it, as has been true for the last sixty years. The decline that now elicits such concern is not a recent phenomenon. It traces back to the end of World War II, when the United States had half the world’s wealth and incomparable security and global reach. Planners were naturally well aware of the enormous disparity of power, and intended to keep it that way.

The basic viewpoint was outlined with admirable frankness in a major state paper of 1948. The author was one of the architects of the new world order of the day: the chair of the State Department’s policy planning staff, respected statesman and scholar George Kennan, a moderate dove within the planning spectrum. He observed that the central policy goal of the United States should be to maintain the “position of disparity” that separated our enormous wealth from the poverty of others. To achieve that goal, he advised, “We should cease to talk about vague and … unreal objectives such as human rights, the raising of the living standards, and democratization,” and must “deal in straight power concepts” and not be “hampered by idealistic slogans” about “altruism and world-benefaction.”
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Kennan was referring specifically to the situation in Asia, but his observations can be generalized, with exceptions, to participants in the U.S.-run global system. It was well understood, however, that the “idealistic slogans” were to be displayed prominently when addressing others, including the intellectual classes, who were expected to promulgate them.

The plans that Kennan helped formulate and implement took for granted that the United States would control the western hemisphere, the Far East, the former British Empire (including the incomparable energy resources of the Middle East), and as much of Eurasia as possible, crucially its commercial and industrial centers. These were not unrealistic objectives, given the distribution of power at that moment. But decline set in at once.

In 1949, China declared independence—resulting, in the United States, in bitter recriminations and conflict over who was responsible for that “loss.” The tacit assumption was that the United States “owned” China by right, along with most of the rest of the world, much as postwar planners assumed.

The “loss of China” was the first significant step in “America’s decline.” It had major policy consequences. One was the immediate decision to support France’s effort to reconquer its former colony of Indochina, so that it, too, would not be “lost.” Indochina itself was not a major concern, despite claims made by President Eisenhower and others about its rich resources. Rather, the concern was the “domino theory.” Often ridiculed when dominoes don’t fall, it remains a leading principle of policy because it is quite rational. To adopt Henry Kissinger’s version, a region that falls out of U.S. control can become a “virus” that will “spread contagion,” inducing others to follow the same path.

In the case of Vietnam, the concern was that the virus of independent development might infect Indonesia, which really does have rich resources. And that might lead Japan—the “superdomino,” as it was called by the prominent Asia historian John Dower—to “accommodate” to an independent Asia, becoming its technological and industrial center in a system that would escape the reach of U.S. power.
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That would have meant, in effect, that the United States had lost the Pacific phase of World War II, fought to prevent Japan’s attempt to establish such a new order in Asia.

The way to deal with such a problem is clear: destroy the virus and “inoculate” those who might be infected. In the case of Vietnam, the rational choice was to destroy any hope of successful independent development and impose brutal dictatorships in the surrounding regions. Those tasks were successfully carried out—though history has its own cunning, and something similar to what was feared has nonetheless since been developing in East Asia, much to Washington’s dismay.

The most important victory of the Indochina wars was in 1965, when a U.S.-backed military coup in Indonesia led by General Suharto carried out massive crimes that were compared by the CIA to those of Hitler, Stalin, and Mao. The “staggering mass slaughter,” as the
New York Times
described it, was reported accurately across the mainstream, and with unrestrained euphoria.
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It was “a gleam of light in Asia,” as the noted liberal commentator James Reston wrote in the
Times.
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The coup ended the threat of democracy by demolishing the mass-based political party of the poor, established a dictatorship that went on to compile one of the worst human rights records in the world, and threw the riches of the country open to Western investors. Small wonder that, after many other horrors, including the near-genocidal invasion of East Timor, Suharto was welcomed by the Clinton administration in 1995 as “our kind of guy.”
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Years after the great events of 1965, Kennedy-Johnson National Security Advisor McGeorge Bundy reflected that it would have been wise to end the Vietnam War at that time, with the “virus” virtually destroyed and the primary domino solidly in place, buttressed by other U.S.-backed dictatorships throughout the region. Similar procedures have been routinely followed elsewhere; Kissinger was referring specifically to the threat of socialist democracy in Chile—a threat ended on “the first 9/11” with the vicious dictatorship of General Pinochet subsequently imposed on the country. Viruses have aroused deep concern elsewhere as well, including the Middle East, where the threat of secular nationalism has often concerned British and U.S. planners, inducing them to support radical Islamic fundamentalism to counter it.

THE CONCENTRATION OF WEALTH AND AMERICAN DECLINE

Despite such victories, American decline continued. Around the 1970s, it entered a new phase: conscious self-inflicted decline, as planners both private and state shifted the U.S. economy toward financialization and the offshoring of production, driven in part by the declining rate of profit in domestic manufacturing. These decisions initiated a vicious cycle in which wealth became highly concentrated (dramatically so in the top 0.1 percent of the population), yielding a concentration of political power, and hence legislation to carry the cycle further: revised taxation and other fiscal policies, deregulation, changes in the rules of corporate governance allowing huge gains for executives, and so on.

Meanwhile, for the majority, real wages largely stagnated, and people were able to get by only by sharply increased workloads (far beyond those of Europe), unsustainable debt, and, since the Reagan years, repeated bubbles, creating paper wealth that inevitably disappeared when they burst, after which their perpetrators were often bailed out by the taxpayer. In parallel, the political system has been increasingly shredded as both parties are driven deeper into corporate pockets with the escalating cost of elections—the Republicans to the level of farce, the Democrats not far behind.

A recent book-length study by the Economic Policy Institute, which has been the major source of reputable data on these developments for years, is entitled
Failure by Design
. The phrase “by design” is accurate; other choices were certainly possible. And as the study points out, the “failure” is class based. There is no failure for the designers—far from it. The policies are only a failure for the large majority—the 99 percent, in the imagery of the Occupy movements—and for the country, which has declined and will continue to do so under these policies.

One factor is the offshoring of manufacturing. As the Chinese solar panel example mentioned earlier illustrates, manufacturing capacity provides the basis and stimulus for innovation, leading to higher stages of sophistication in production, design, and invention. Those benefits too are being outsourced—not a problem for the “money mandarins” who increasingly design policy, but a serious problem for working people and the middle classes, and a real disaster for the most oppressed: African-Americans, who have never escaped the legacy of slavery and its ugly aftermath, and whose meager wealth virtually disappeared after the collapse of the housing bubble in 2008, setting off the most recent financial crisis, the worst so far.