Why I Call It a Global Night-Club

Stock-market brawls in the global night-club

by Gwydion M. Williams

[I wrote this as an expansion of my earlier view about what the globalised world really was.]

McLuhan became famous by talking about a “global village”. Now he was right about modern telecommunication allowing the whole world to chat as quickly and easily as the people in a single village used to do. But typically American and wrong in ignoring the social side. For a village is above all a social unit. People know each other, know each other’s parents and grandparents, share common values, care about each other. Nothing like that exists on a global basis. Not even a common language, though English is getting there. And all attempts at building a global society are resisted by the United States, which regards International Law as something that applies only to other people.

Our “global village” is no more than a global night-club. An asocial gathering of people out to have fun and make use of each other. And many of them finding it most enjoyable just at the moment, it must be admitted. No sensible person goes to a night-club looking for compassion or concern. It is a global order of sorts, and that splendid space picture of a mottled Earth with no visible national boundaries offers a promise of something better eventually.

America manage to come up with a crude but effective multi-national culture when it found itself locked into the Cold War. Partly because it was multi-national already, with the states having a lot of the features of independent nations. Hollywood had already devised ways of selling itself to a diversity of peoples of strongly differing views within the USA. Used dodges like a Biblical theme to sell crude sex-and-violence – a lot of it was milder than the Old Testament version anyway! So in a world already exposed to West European values by several centuries of colonialism, a “global night-club” was readily devised.

Meantime Moscow discredited itself by invading Hungary in 1956, Czechoslovakia in 1968. Lost its last appearance of virtue while successfully uprooting the radical ideas that might have regenerated the system, that did regenerate the more flexible West.

At the end of World War Two, Leninism had its own coherent world order worked out and flourishing. Had the Cold War been between this new order and the old world of the 1930s, Leninism would have won. The old order had produced two world wars and a massive slump. People were ready to accept totalitarianism just so as to keep some sort of civilised order. But the Atlantic Alliance provided a more liberal alternative. An alternative that over the decades gave a framework for many different peoples to live and prosper in different ways.

Most crucial in the 1950s and 1960s was the dramatic advance of Western Europe. In the 1950s, France was visibly poorer than Britain. Thanks to a successful mix of state intervention and trade protectionism in the Common Market, France and Germany and Italy caught up and then surpassed Britain. Became strong to a point where Britain wanted to join their club, and Europeans apart from De Gaulle thought that it was safe to admit them. This may have been a mistake. For certain, the vital currency stability was lost in the 1970s, under a mix of pressures. Including financial speculation and the sudden rise in the price of oil.

In the 1970s and 1980s, East Asia took over. East Asia had been richer and more sophisticated than Europe for most of human history. The Han Empire in China was richer and larger than the Roman Empire – and of course there was a huge swathe of other nations in between, it is sheer European small-mindedness to suppose that the Romans ever came close to ruling the world. No more did Alexander before them, he ran out of steam in the north-west of India. As later as 1776, Adam Smith hailed the static and closed-minded China of his time as richer than any part of Europe. As it most likely was. So East Asia’s return to parity is a fairly natural event in human history. But the events of the last few months are a decidedly bumpy patch in that road.

It was the success of East Asia that finished off the Leninist challenge. With West Europeans clearly committed to their own Mixed Economy, there was still a chance that the battle could be won by Leninists in the Third World. But then Japan achieved parity with Europe, followed by the Tiger Economies. China opted for the East Asian Tiger model. The Soviet Union collapsed in a fit of despondency, yielding up Eastern Europe as a free gift to the West.

A rather badly treated gift, it must be added. Economically, all of Eastern Europe is worse off than it was when Leninism fell. Three things have kept these ill-treated nations in line. Cultural nationalism, able to reassert itself now that their governments are no longer chosen in Moscow. Cultural liberalisation, including the set-drugs-rock&roll scene that late Leninism struggled to keep out. And the prospect that this limited admission to the back seats of the global night-club is only the first stage, with full integration happening in the longer term.

So is East Asia now “surplus to requirements”? They are certainly not being accommodated as they were accommodated in the Cold War. In those days, American would give them anything to stop them from being the next wave of Leninist states. American policy makers may well have decided this, just as they decided that their old ally Saddam Hussein was no longer needed with the USSR fallen and Iran contained.

People forget that Saddam was in deep trouble for several months before he invaded Kuwait. He had almost bankrupted his nation in defence of Arab and Western interests. He did this at a time when Iran did seem poised to expand. He played the same role as Poland did in containing the Soviet Union, and the Polish regime of the 1920s and 1930s had as much Fascism and rather more anti-semitism as Baathist Iraq. Saddam was America’s friend for as long as they thought they needed him. But then he looked set to be discarded, as the West’s old friend Ceaucescu was discarded in Romania. Iraq was in deep trouble, burdened by debts in defence of weak and cowardly Gulf states that mostly needed outside protection against their own people.

What was done to Iraq could have been a trial run for a general curbing of Third World power. A demonstration that expensive military hardware is useless against Western power. Militarily, it worked wonderfully. Politically, it then flopped. In the snarled-up mess of the New World Order, one has to glad about the continued prosperity of the odious Saddam Hussein.

I had no regard for Saddam before the invasion of Kuwait. Had his sudden use of armed force been dealt with under a genuine system of international law, that would have been fine. Anything anyone might see fit to Saddam would be fine by me, so long as it came out of a genuine and impartial law.

International Law as understood by George Bush meant organising a global lynch-mob. Posturing on the assumption that he was a global boss-man who could easily crush a small-timer like Saddam. Establishing a New World Order in which the President of the USA could make and remake the rules as the whim too him.

Only Bush failed. Iraq pulled out of Kuwait, as they had known they must when their initial seizure was rejected by world opinion. But Saddam survived against the odds. He has so far outlasted the last leader of the USSR, a President of French, a President of the United States and two British Prime Minister. Even if falls tomorrow, he had had a pretty good run. The best efforts of “Boss Bush” have merely elevated a tin-pot dictator to a global status. Given the man an historic importance that he would never otherwise have had.

It is better for a profoundly guilty man to escape lynching, that for lynch mobs to be sanctified as International Law. The failure to topple Saddam, followed by the serious snarl-ups in Somalia and Bosnia, have robbed America of the prestige it needed to be Global Boss, the Top Bully in the global night-club. When Saddam was targeted again, there was a sudden reluctance to lend support. at the same time as Israel was left conspicuously free to ignore its own international obligations. The best justification for Israel’s existence, a place of safety for all the world’s Jews, is being wantonly put at risk by a government that seems intent on recreating the borders of Israel as they were under the short-lived kingdom of David and Solomon. An agreement that reasonably balanced Arab and Israel claims is being ignored, and the USA is underwriting this disregard of the nearest thing to functional international law. And it is being done for no better reason than that there are more US electoral votes in backing Israel than in curbing Israel.

At the time of writing, Israel is still misbehaving and still Saddam seems ahead on points.

Meantime East Asia is in trouble. Maybe more trouble than the USA would want, given that the Gulf War demonstrated how hard it is to turn military victory into political success. But there is a very definite desire to use the present crisis to inflict Thatcherite policies on societies that have up until now been run on “stakeholder” lines.

The very people who saved the Western system during the Cold War are being punished. Beginning with America’s own working class, who had seen their standard of living rise steadily all through the 1950s and 1960sin return for their loyal anti-communism. And then stagnate from the 1970s onwards, with Leninism no longer a serious force in Europe after the 1968 invasion of Czechoslovakia. The benefits of all further growth has gone to the “Overclass”, the top 10% whose income is mainly derived from ownership instead of work. Whereas in Britain life has continued to improve for most people, in the USA it has not. A process regarded as inevitable and unavoidable by all those doing very nicely out of the new order.

The 1970s also saw the successful breaking of the monetary stability that had been established after World War Two. Back then, people knew how much financial speculation and games with money had produced the social turmoil that had made both Fascism and Leninism popular. But when the system came under strain, there was a general willingness to abandon it.

The 1980s saw a series of crises for Western Europe, and a general spread of capitalist values at the expense of the stakeholder values of the 1940s. It was justified as both more honest and more efficient, it was neither. The period 1950 to 1975 was an optimum for economic growth. And corruption in the state sector is merely a carry-over of practices that are normal in the private sector. No need for bribery, when everything is openly for sale. No need for cash in brown envelopes when politicians go looking for entirely legal political contributions from the rich and from business

People confuse the existence of wealth with the ownership of wealth. Thus the apparent disappearance of fifteen billion pounds in a stock market crash is treated as if it were like the vanishing of real value – and real lives – in an earthquake that ruined some large city. But the real wealth of a society is in its work and in the goods it produces. The nominal ownership of these goods is a secondary matter. The real value of work and goods grew best when ownership and share values were treated as minor matters, when financial speculations were limited and slow.

The values of the Overclass have been sold to the mainstream of society on the pretext that it would be good for them. Thatcher was certain that the poor would benefit from trickle-down, a smaller share of a larger and faster-growing economy. Now this notion is in itself mathematically illiterate, 7% of 100 is more than 5% of 120. Policies that gave the poor a smaller share of a faster growing economy might or might not benefit them, it would depend on the exact share. But this would only matter if the economy was growing faster than the 1950 to 1975 norm. It is not. The whole Thatcher – Reagan policy was no improvement on the older stakeholder systems, was in fact distinctly worse.

If anyone were to really restore Victorian values, never mind the social cost, it would be an utter economic disaster. Victorian Britain managed a puny 1.2% average annual economic growth, the USA a slightly stronger 1.8%. Compare this with 2.5% for Britain from 1950 to 1975, or an average of 4% for India under Nehru’s socialism. India has of course been persuaded to break with socialism on the promise of being the next “Tiger” economy, that was before the Tiger economies ran into their present problems.

The sudden collapse of the Soviet Union made the USA overconfident, too prone to push its luck. The fall of a whole slew of other Leninist states in Eastern Europe looked impressive, until one remembers that all of them had been dependencies of Moscow. The invasion of Czechoslovakia in 1968 finished off the main strong native pro-Russian and pro-Communist tradition in Eastern Europe, elsewhere life was frozen in along the patterns of 1945. Apart from this there was the fall of Yugoslavia, smaller nations against the dominant Serbs. Eastern Europe also saw the reverse, Slovaks separating from the very Westernised Czechs.

Elsewhere, it was Leninists who put the nation together, and are mostly still trusted to defend it. China, a total mess when run by the pro-American Kuomintang. (The subsequent success of Taiwan owes much to the industrial base Japan had given it when it was their colony. The rest was down to US subsidies to their alternative China.) One should also expect continuing adherence to Leninist forms by Vietnam, the first and so far the only nation to inflict a decisive defeat on the USA (leaving aside a minor Canadian foray in 1812). And Cuba must remember that it was on course to be a grand brothel and casino for USA, where people with a puritan veneer could enjoy what they would not allow back home, and also would not deny themselves.

The global market is full of oddities, including abuse of sovereign rights by tiny economies that provide havens for rich people to legally or illegally evade tax. The worst event so far, the collapse of a giant Japanese financial institution, was helped by this blatant trickery. Off-shore havens subject to no serious control or inspection were part of process collapsing Yamachi. They “hid more than £1 billion in suspect loans made to preferred customers through the offshore financial haven of Cayman [Islands]” 24 Nov 94, Guardian. The Financial Times for the same day explained “Tobashi”. Yamachi “set up a series of companies in the Cayman Islands were large losses were apparently ‘parked”’.

These fiddles mean that the apparent balance is unreal. Anyone serious about market forces would want to end such nonsense. They are not, of course, not apart from a few mad Libertarians with no social power. The Overclass, the people who dominate through their economic power, want a mix of global economy and fragmented sovereignty, with minimal global controls just for the benefit of the Overclass..

If the notion of a “level playing field” were taken seriously, its advocates would be keen to level bizarre tax havens like Liechtenstein and the Caiman Islands. It is not of course taken seriously. Such talk is useful to persuade the mainstream of society to remove their own social protection for the benefit of the Overclass. But the Overclass is all in favour of interventionism when they expect to benefit. The same people who say markets must not be interfered with are silent or approving when the interference is in the interests of avoiding a global slump.

Likewise trade negotiations have unlimited and automatic, according to right-wing economists. This wisdom has somehow escaped every single person with actual responsibility for such matters. It is held by those who can say anything they like at little cost or risk. But not by those who would be held to blame trade negotiations went wrong. So “liberalisation” is always limited, and the USA remains very protectionist.

People are saying that South Korea and the other sickly tigers needs a dose of Thatcherism. Economic statistics show that Thatcherism did us no damn good. Life for ordinary people would be at least as good and maybe better if she had been a real conservative and restored the consensus of 1940s. It is only the emerging Overclass that gained from Thatcher’s and Reagan’s policies.

What is being planned for East Asia is a reshuffle of ownership, with some losers and some gainers. The main target is the “iron rice bowl”, the idea of job for life. This was needed when Leninism was available as an alternative. Now the idea is to break up those East Asian societies, incorporate some into the Overclass and push many of the rest back into the sort of poverty they only recently escaped from. Repeat what has been done in the USA, when 10% of the society gain ground at the expense of the rest. Only it has not yet happened very much in Europe. Is still being resisted in East Asia.

Even in America, people are noticing that New Right policies are not at all conservative. They talk loudly of their love for traditional values, but actions speak louder than words. Removing the financial support for traditional values turns out to undermine those values, just as common sense would have told you. Common sense can be wrong, but not often, and definitely not in this case.

I once heard an elderly American say that when he was young, a job was for life and so was a marriage. Indeed, though modern life needs some civilised procedure to end a marriage that has gone wrong, the whole process of turning people into interchangeable parts in a world-machine has gone too far must be ended. America pioneered all this in Western culture. They talk a lot about religion and morality, but are damn bad at translating such talk into social reality.

In the present snarl-up, one has to look to financial speculator George Soros to find a famous and powerful person talking some sense. A big winner in the global casino, he has won by assuming that it is a silly meaningless system. Investors are a herd, and a smart cool fellow can make a fortune by figuring out when and how they are going to stampede.

Being enormously rich and successful, Soros can mock the social values of the Overclass without being accused of the “politics of envy”. Functionally he is part of the Overclass. But by some odd personal quirk, he is ready to openly condemn its values. Thus “Since the end of the Second World War, the state has played an increasing role in maintaining economic stability ensuring equality of opportunity and providing a social safety net…But the capacity of the state to look after the welfare of its citizens has been severely impaired by the globalisation of the capitalist system which allows capital to escape taxation much more easily than labour.” (News Weekly, November 1st 1999)

In East Asia, the various private corporations provided many of the social security functions that would have been handled by the state over here. That was why they had a smaller state sector, a circumstance that will have to change if they are now to be “downsized” and shed their social responsibilities. Soros does not see it, he is not much of a commentator. But he is at least willing to confirm the common-sense notion that “markets cannot be left to correct their own mistakes because they are liable to overreact and behave in an indiscriminate fashion.

Soros end with a call for an open society. Open to what? In the 1930s, Britain and Continental Europe and the USSR and the USA were open to different things and closed to different things. It was the USSR that was the clear and definite advocate of anti-racism and of equality of the sexes. On the ending of colonialism and on the removal of class barriers, the USA and the USSR were somewhat on the same side. The 1960s saw the positive side of the Soviet model absorbed into a “Open Society” that was open to far more than even America had been ready for.

When an opposition movement is physically crushed, but has its program taken over and implemented by the ruling group, this is by no means a complete failure. The paralysing notion that the whole of 20th century socialism was an error or failure is refuted by looking at just how much of socialism and radicalism has been incorporated into standard values. The Tory Party of 1997 has more in common with the Communist Party of 1922 than with the Tory Party of 1922.

Just now the intelligensia, on the rebound from Leninism, has decreed that “freedom” means no one having any security. Everyone is under threat from everyone else, and acts accordingly. The consequent collapse of social and family values is then blamed on welfare. But all trends reverse themselves eventually, and this one may be ripe for reversal in Europe, at least.

 

First published in Labour & Trade Union Review, 1997.

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