Analyzing President Donald Trump’s
excoriating traditional U.S. trading partners at the Group of Seven’s
(G7) May meeting in Quebec, Marxist economist Michael Roberts
commented: “What all these Trumpist antics revealed is that the
period of the Great Moderation and globalization, from the 1980s to
2007, when all major capitalist states worked together to benefit
capital in all countries (to varying degrees) is over. The Great
Recession of 2007-8 and the ensuing Long Depression since 2009 has
changed the economic picture.
“In a stagnating world capitalist
economy, where productivity growth is low, world trade growth has
subsided and the profitability of capital has not recovered,
cooperation has been replaced by increasingly vicious competition—the
thieves have fallen out.”
The “thieves” here include the
most powerful capitalist nations on earth. German Chancellor Angela
Merkel, Europe’s most influential leader and representative of its
most powerful economy, concluded similarly. The New York
Times summarized Merkel’s views as follows: “The United
States of President Trump is not the reliable partner her country and
the Continent have automatically depended on in the past. Clearly
disappointed with Mr. Trump’s positions on NATO, Russia, climate
change and trade, Ms. Merkel said that traditional alliances were no
longer as steadfast as they once were and that Europe should pay more
attention to its own interests ‘and really take our fate into our
own hands.’”
We should note here that Merkel’s
May 7, 2017, remarks were made a year before Trump’s
Quebec outburst, an indication that the June 2018 Quebec G7 fireworks
were far from a first in the ongoing tensions between ever-competing
world capitalist entities.
Merkel continued, “The times in
which we could rely fully on others—they are somewhat over.”
Two additional paragraphs from
Robert’s assessment make the point that, notwithstanding Trump’s
disgusting reactionary hyperbole on an ever-broadening range of
issues, the antics of a “rogue” president are subordinate to the
reality of the deepening world capitalist crisis. The margins for
long-term resolution via the major international institutions that
previously served to at least partially mitigate major disputes have
narrowed.
U.S. elites in overall agreement
with Trump
Trump’s seeming idiocies include
withdrawal from the Iran nuclear agreement, withdrawal from the
nearly worthless 21 Paris climate accords, his ultra-reactionary
racist immigration policies—though similar to Obama’s in
separating detained/imprisoned parents from their children—praise
for the Supreme Court’s approval of the “constitutional” right
(freedom of religion?) of a baker to refuse to prepare a wedding cake
for an LGBTQI couple, a proposal/suggestion to his National Security
Council to increase the U.S. nuclear weapons stock “100 fold”—also
similar to Obama’s proposals to “modernize” the U.S. nuclear
weapons stock—and his most recent order to establish a sixth arm of
the Pentagon( the “Space Force”) to militarily “defend” U.S.
“interests” in outer space. It can be demonstrated, however, that
on virtually every front, his twisted politics have a rational
core—that is, to advance what he perceives as the policies required
to protect a weakened U.S. capitalism from its competitors abroad,
while advancing their interests against U.S. workers at home.
Obviously, he is an embarrassment
to the majority of the ruling-class elite. Virtually every major
corporate newspaper and media outlet in the country daily pillories
his too overtly right-wing tweets and pronouncements, but the essence
of his direction, as opposed to the form, is not too dissimilar from
mainstream ruling-class views.
Robert’s summary is quite apt:
“At the [G7] meeting Trump slammed into the other leaders, claiming
that their governments were imposing ‘unfair’ trading rules on US
products and they needed to reduce their surpluses on trade with the
US. The other leaders had already responded to the US tariff measures
with planned reciprocal tariffs on key US exports and now they
replied to Trump’s attacks with arguments and evidence that, on the
contrary, it was the US that restricted foreign imported goods and
services.”
Roberts concludes dramatically:
“And thus the trade war has begun—a war that the major capitalist
economies have not engaged in since the 1930s depression and which
was supposed to be resolved by international agreements like General
Agreement on Tariffs and Trade (GATT), its successor, the World Trade
Organization (WTO) and the North American Free Trade Agreement
(NAFTA) in the post-war period. Trump has called the WTO the worst
possible trade deal and NAFTA the next worst (for America).”
Rules governing the now fragile WTO
The WTO, established in 1995, today
includes 164 nations. It was formed to resolve trade disputes via a
system of binding arbitration wherein a seven-member panel, operating
under established rules, has the final word. Over the past two
decades, the U.S. has brought more disputes to the WTO than any other
nation, winning, according to Trump administration figures, more than
the global average. This is Trump’s way of stating that more often
than not the U.S. has been the victim of unfair practices of its
competitors.
In truth, the founding rules of the
WTO, as we shall see, operate to the advantage of the U.S. and its
previously associated great imperial partners. Partners no more in a
world based on ever-increasing competition for ever-decreasing world
markets, each player seeks to impose its own rules to the advantage
of its own capitalist class.
But there is a “Catch 22” in
the WTO’s “rules,” that is, a series of exceptions to
this “free trade” agreement that allow for its violation for
claimed reasons including environmental protection, national
security. Today, Trump has repeatedly cited the WTO’s “national
security” exceptions to impose punitive tariffs on its leading
competitors.
With this in mind, the WTO may be
in danger of collapse. During this month, September 2018, four of the
seven arbitration panelists are scheduled to be replaced, leaving but
three—the bare minimum needed to issue rulings on trade disputes.
If the Trump administration continues to refuse to reach agreement as
to who will replace these termed-out arbitrators, in just over a
year’s time only one will be left, a number insufficient, according
to WTO rules, to operate.
Needless to say, the choice of
arbitrators is crucial. In the multi-billion dollar game of
international trade agreements, there are no neutrals. The top
dogs want their “expert” arbitrators in place to decide such
disputes. A number of Trump’s internationally prominent critics
have not been silent on this matter. The Aug. 13, 2018, New York
Timesmade this clear as follows:
• Jennifer Hillman, professor at
Georgetown Law Center: “It’s putting tremendous stress on the
system. There are those who would go so far to say that the U.S. has
almost effectively withdrawn from the WTO by engaging in all the
unilateral tariffs we’ve seen.”
• Rufus Yerxa, president of the
National Foreign Trade Council and a former deputy director general
of the World Trade Organization: “If the United States has
rewritten the rules of the WTO system to say you can do anything you
want if it’s in your national security interests, be prepared for
every country in the world to come up with a new definition of what
is its critical national security interest.”
• Roberto Azevêdo, current WTO
Director General, referring to the WTO challenges to Trump’s
aluminum and steel tariffs: “Whatever the outcome—regardless of
how objective, balanced and unbiased it is—somebody is going to be
very unhappy.”
• Marc Vanheukelen, European
Union ambassador to the WTO, speaking to a July meeting of the
organization’s 164 members at its Geneva headquarters: “In such a
world, where power has replaced rules as the basis for trade
relations, it will be the smallest and poorest that will be hurt the
most.”
The Times noted that “Mr.
Vanheukelen was among dozens of members who stood to complain that
the WTO was on the verge of becoming dysfunctional. Many blame the
Trump administration for encouraging other countries to flout
long-established rules of the game and introducing a confrontational
tone to an organization that has traditionally functioned by
consensus and good will.”
China and erosion of “trade
consensus”
Today, in the context of a
crisis-ridden world capitalist economy, “consensus” and “good
will” have been cast aside, with the ruling classes of all
declining nations, including the most powerful, finding themselves
ever more locked into the deadly competition for markets and profits,
ever maneuvering to stay afloat at the expense of their capitalist
adversaries and always at the expense of its own workers.
It is doubtful that any section of
the U.S. ruling class involved in steel and aluminum production
objected to Trump’s imposing tariffs on competitive foreign imports
for these commodities, or, for that matter, on any others where U.S.
corporations lag behind foreign competitors. What irked the
anti-Trump wing of the U.S. ruling class was less Trump’s defense
of one or another key section of U.S. capital and qualitatively more
the fact that he failed to do so in the “civilized” framework of
the WTO, where they believe that the United States still retains the
upper hand.
But the relationship of forces in
the world capitalist order, and thus in the WTO, has undergone some
important changes over the past decades. China is a classic example.
China’s WTO entry in 2001 was conditioned on its respecting foreign
corporations’ intellectual property rights—that is, agreeing not
to compete in the future when its own primitive factories could, in
time, be converted to state-of-the-art technologies, which the U.S.
today insists are protected by U.S. patents. These “inviolable”
intellectual property rights, as with the U.S.’s claimed national
security interests, are at the center of Trump’s steaming rhetoric
against Chinese exports to the U.S.
For close to two decades and to
this date, the level of Chinese labor productivity has lagged far
behind that of most capitalist nations. But this is rapidly changing.
With regard to an increasing number of key commodities traded on
world markets, including major machine tools for industrial
production and high technology hardware, China’s productivity
levels are rapidly increasing—ever more closing the gap and thus
posing a threat to U.S. corporate interests.
In the imperialist mindset, any
nation seeking to introduce modern and competitive technology is
considered a threat. Trump today, and the broader sections of the
U.S. elite for the past decades, had always considered China the
perfect solution to the growing incapacity of the United States to
effectively compete on world markets.
China offered a virtually unlimited
supply of cheap labor for hire to U.S. and foreign corporations more
generally. Not too long ago, for example, teenage women were housed
permanently in dormitory factories and paid six cents per hour. These
labor conditions, as well as tax-free guarantees and other perks sent
profit-declining U.S. manufacturers there to boost their prospects.
Today, the average Chinese wage is closer to $2.50 per hour, a labor
price that has led some of the capitalists to leave for lower wage
nations like Vietnam, Indonesia, and Thailand. The paradise of
near-slave labor in China has given way today to the Chinese ruling
class’s effort to create its own “middle-class” market to
consume China’s cheap commodities, the same market that U.S.
capitalists hoped to dominate.
We need only add here for future
edification that in the course of creating this internal market,
China’s income disparity has soared to be among the greatest on
earth, with the vast proportion of its new wealth going to the
capitalist elite and the new middle class of perhaps 300 million
people, while the remaining 1.1 billion languish in overall poverty
or close to it.
Trump’s denunciation of China for
“stealing” U.S. technology was followed by his administration’s
widely publicized list of proposed tariffs on Chinese imports. The
list includes 1102 categories of goods, all focused on high-tech
industries like nuclear reactors, aircraft engine parts, ball
bearings, bulldozers, motorcycles, and industrial and agricultural
machinery. These are precisely the categories in which China has
employed the advanced robotics and related super-modern production
technologies—that is, intellectual property rights.
Chinese capitalists long ago
estimated that their agreement to subordinate their economies to U.S.
and world imperialist investment in order to secure the necessary
initial foreign investment was temporary and would, in time, allow
them to participate on world markets as serious competitors. That
time has come—hence the Trump countermeasure tariffs aimed at
perpetually keeping China as a second-rate player. Obviously, neither
China nor the European Union nations, nor any other “self-respecting”
big time capitalist entrepreneur, intend to remain permanent
second-rate players.
North American Free Trade Agreement
NAFTA is another example of how
trade agreements are arrived at. It emerged as the joint product of
essentially the entire U.S. ruling class. Both NAFTA and the U.S.
congressional vote to admit China to the WTO were accomplished under
the aegis of the Bill Clinton Democratic Party administration. But
both were opposed, for the sake of appearances only, by the then
House majority Democrats, who (falsely) claimed to be interested in
protecting U.S. workers against cheap foreign labor. Similarly, in
the case of China’s admission to the WTO the vote in favor included
only 74 Democrats joined by 164 Republicans, the latter a
congressional minority at that time, but joining with the needed
Democrats to accomplish an overall ruling-class objective.
Despite its “free trade”
imprimatur, NAFTA incorporated a myriad of negotiated protectionist
measures aimed at defending the weaker sections of U.S. capital. It
was the product, as with all such trade agreements, of the broadest
deliberations between U.S. capitalists on the one hand, and similar
negotiations with Mexican and Canadian elites on the other, with the
latter two compelled to make concessions to the stronger U.S.
capitalists in order to remain players—but lesser players to be
sure.
Ruling class agrees with Trump’s
policies
In truth, there are no fundamental
disagreements among the U.S. elites regarding trade. As a
generalization, every sector has long become accustomed to
behind-the-scenes deals wherein its particular interests are
protected at the expense of foreign competitors. Undoubtedly, the
lines sometimes become blurred when the “foreign competitors” are
in reality U.S. corporations. But this too is usually factored in
during the course of the usual secretive dealing that marks top-level
decision-making.
There were near-zero objections,
for example, when a bipartisan Congress gifted $1.5 trillion in tax
relief to the corporations and banks of the ruling rich, a fact that
in and of itself enabled bourgeois economic analysts to post and
predict some figures that indicated a modest, but one-time uptick in
otherwise stagnant GDP figures.
Similarly, there were few, if any,
objections when Congress boosted annual military spending by an
unprecedented $80 billion, an amount exceeding even Trump’s initial
request. We note here in passing that the $80
billion increase exceeds Russia’s total annual military
budget of $50 billion—as compared to the U.S.’s budgeted $1
trillion for overall war purposes! On June 21, 2018, the U.S. Senate,
by a vote of 85-15, approved this military budget. The few “doves”
that voted “no,” like Bernie Sanders, Elizabeth Warren, and
“libertarian” Rand Paul, did so likely to preserve their future
political “peace candidate” credentials.
Working people have no stake in
trade wars
The recent joint statement by
Socialist Action (U.S.) and our sister party Socialist Action/Ligue
pour l’action socialiste in the Canadian state summarizes our views
well:
“Global capitalist competition
[including the current trade wars] is a completely unavoidable aspect
of the system of private profit. As competition results in new
innovation and automation temporarily increases the rate of profit
for the first innovators these gains are soon offset again by the
rapid adoption of even newer technologies by competitors and the
consequent resumption of the fall of profit rates.
“In their desperate struggle to
fight the falling rate of profit, (or, as Marx said, “the law of
the tendency of the rate of profit to fall), capitalists try to
reduce costs by attacking trade unions and workers’ rights, by
attacking wage and benefit levels, by attacking general social
benefits such as education, medical, and pension benefits, by
refusing to accept responsibility for the massive environmental
damage caused by cutthroat capitalist competition, and by
transferring production to low-wage, unregulated areas both within
and outside their own countries…
“The world’s working people
have no interest in this potential world conflagration. In the end,
when capitalists win, workers lose—a fundamental law of the
capitalist system that has been verified time and again over the past
decades and centuries. The common interest of workers lies in
defending working people everywhere against all the onslaughts of
capital. This means international solidarity on every front, from
united worldwide efforts to organize workers into powerful unions to
united opposition to capitalist wars and the capitalist destruction
of the environment…
“There is no such thing as
peaceful and/or regulated competition among capitalist nations. No
self-respecting capitalist is in business to be the world’s “nice
guy.” There are only winners and losers in this deadly game of
production for private profit. Donald Trump simply tore the mask off
the brute face of a predatory system in decline. Justin Trudeau plays
the same game as Trump on the world scene and makes sure that
everyone knows that Canadian capitalism can bare its own claws in the
profit game.”
The most serious representatives of
the U.S. ruling class would much prefer a more verbally tempered
president, one like Obama, or even Hillary Clinton, who would seek
the counsel of the leading ruling-class representatives—that is, of
the traditional team of cabinet and other “advisers” who are less
blatant in guaranteeing the real interests of the nation’s leading
bankers, financiers, and corporate magnates.
That Trump has fired one after
another of his advisors who are slightly less noxious and more
cautious in their rhetoric, after each has counseled him to moderate
his vitriol and embarrassing tone and tweets, is subordinate to the
fact that no section of the ruling class, including their Democratic
and Republican Party spokespersons, has broken with Trump on
fundamental policies that favor the rich over the 99 percent.
Working people have no interest in
the outcome of the upcoming “lesser-evil” electoral charade that
is today being orchestrated to a fever pitch by the corporate media.
A break with ruling-class politics is on the order of the day. The
formation of an independent labor party based on a reinvigorated,
democratic, and fighting union movement, in alliance with all the
oppressed and exploited, would be a major step forward in challenging
capitalism’s current dominance in the political and economic
arenas.
>> The article above was written by Jeff Mackler, and is reprinted from Socialist Action newspaper.
No comments:
Post a Comment