Globalization Marches On: Growing popular outrage has not challenged corporate power.
by Noam Chomsky
Bringing Obama to Heel
Popular anger finally evoked a rhetorical shift from the administration, which responded with charges about greedy bankers. "I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street," Obama told 60 Minutes in December. This kind of rhetoric was accompanied with some policy suggestions that the financial industry doesn't like (e.g., the Volcker Rule, which would bar banks receiving government support from engaging in speculative activity unrelated to basic bank activities) and proposals to set up an independent regulatory agency to protect consumers.
Since Obama was supposed to be their man in Washington, the principal architects of government policy wasted little time delivering their instructions: Unless Obama fell back into line, they would shift funds to the political opposition. "If the president doesn't become a little more balanced and centrist in his approach, then he will likely lose" the support of Wall Street, Kelly S. King, a board member of the lobbying group Financial Services Roundtable, told the New York Times in early February. Securities and investment businesses gave the Democratic Party a record $89 million during the 2008 campaign.
Three days later, Obama informed the press that bankers are fine "guys," singling out the chairmen of the two biggest players, JP Morgan Chase and Goldman Sachs: "I, like most of the American people, don't begrudge people success or wealth. That's part of the free-market system," the president said. (Or at least "free markets" as interpreted by state capitalist doctrine.)
That turnabout is a revealing snapshot of Smith's maxim in action.
The architects of policy are also at work on a real shift of power: from the global work force to transnational capital.
Economist and China specialist Martin Hart-Landsberg explores the dynamic in a recent Monthly Review article. China has become an assembly plant for a regional production system. Japan, Taiwan and other advanced Asian economies export high-tech parts and components to China, which assembles and exports the finished products.
The Spoils of Power
The growing U.S. trade deficit with China has aroused concern. Less noticed is that the U.S. trade deficit with Japan and the rest of Asia has sharply declined as this new regional production system takes shape. U.S. manufacturers are following the same course, providing parts and components for China to assemble and export, mostly back to the United States. For the financial institutions, retail giants, and the owners and managers of manufacturing industries closely related to this nexus of power, these developments are heaven sent.
And well understood. In 2007, Ralph Gomory, head of the Alfred P. Sloan Foundation, testified before Congress, "In this new era of globalization, the interests of companies and countries have diverged. In contrast with the past, what is good for America's global corporations is no longer necessarily good for the American people."
Consider IBM. According to Business Week, by the end of 2008, more than 70 percent of IBM's work force of 400,000 was abroad. In 2009 IBM reduced its U.S. employment by another 8 percent.
For the work force, the outcome may be "grievous," in accordance with Smith's maxim, but it is fine for the principal architects of policy. Current research indicates that about one-fourth of U.S. jobs will be "offshorable" within two decades, and for those jobs that remain, security and decent pay will decline because of the increased competition from replaced workers.
This pattern follows 30 years of stagnation or decline for the majority as wealth poured into few pockets, leading to what has probably become the greatest inequality between the haves and the have-nots since the end of American slavery.
While China is becoming the world's assembly plant and export platform, Chinese workers are suffering along with the rest of the global work force. This is an unsurprising outcome of a system designed to concentrate wealth and power and to set working people in competition with one another worldwide.
Globally, workers' share in national income has declined in many countries-dramatically so in China, leading to growing unrest in that highly inegalitarian society.
So we have another significant shift in global power: from the general population to the principal architects of the global system, a process aided by the undermining of functioning democracy in the United States and other of the Earth's most powerful states.
The future depends on how much the great majority is willing to endure, and whether that great majority will collectively offer a constructive response to confront the problems at the core of the state capitalist system of domination and control.
If not, the results might be grim, as history more than amply reveals.
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