The driving force of debt

By Alazar K.
Alazark2000@yahoo.com

Continued from last week,

Loan money funnelled in this way leaves the country faster than it arrives, and its destination, as profit or fee, are the multinational corporations and not primarily the banks. Whatever interest is paid, the loan remains. The green light signals that every asset the country possesses is the object of a fire sale: land, crops, forests, petroleum, minerals, labor, the consumer market, essential services, entertainment, etc. The tax structure, reformed to promote fictional productive reinvestment by the rich, bankrupts national low- and middle- level firms, already burdened by the removal of customs barriers to competing low- cost imports.

To add insult to grave injury, international speculators wage bets on the value of the currency, bonds, and stocks, bets so over- extended that the vaguest rumour can and does precipitate an entire region into collapse. The social costs of this ingenious shell game are enormous, but the rewards accruing to those who ally themselves as intermediaries and agents of foreign banks and firms are irresistible.

Desperate popular protest and resistance to the prospect of starvation leads to the reinforcement of the security forces and the signing of military assistance and training agreements that dovetail with economic aid. Governments who surrender sovereignty and willingly acquiesce in the forced march of their national populations toward ever more extreme poverty stay in power only by abandoning democratic practices and resorting to repression.

The profits earned by multinationals and their local representatives are huge, so great that they create a formidable incentive for illicit financial transactions, trade in drugs, and arms and money laundering. These lucrative activities further erode state sovereignty, decimate state assets, and hasten the demise of the productive domestic economy. They also militarize society and provide the additional foundation for a spoils system conducive to high levels of civil violence and warfare among its beneficiaries and against the disenfranchised.

This process, deftly adapted to local circumstances, has proceeded in near lock- step in almost 100 countries around the world. It unfolds with the methodical and well- practiced rhythm of a Mafia bust- out operation. The principal decision- makers of the G- 7 countries, the IMF, the World Bank, and the WTO, are well- endowed with "reflexivity" and "institutional learning" acquired over decades, and well aware of the results from "case to case."

The broad range of these operations at this point provides an impressive sample for comparative analysis. The chief difference between late 19th century European imperialism and the current imperial structure under American dominance is in terms of the sophistication of the techniques and institutions and the array of instruments, technological and cognitive, that sustain such a structure.

A century ago, imperialism abroad was accompanied by concessions to working people and the poor at home, while mobilizing them around jingoist and racist perspectives. Such concessions are not necessary today, thanks to the pervasive myth of prosperity, growth, and individual opportunity propagated by the mass media and made more convincing by the fabulous wealth in computer- based technologies. In addition, the threat to the planet is evident in dramatic changes to the earth's climate and the disappearance of whole species.

At this point, the industrial liberal democracies operate, literally, as regimes of impunity abroad and at home. These are governments whose primary domestic policy goal is to be able to act freely, without accountability or constraint vis-à-vis their own citizens. In the media, the world is turned upside down. The contras and the KLA are "democratizers"; the lethal sanctions against Iraq were to deliver its people from their dictator; the destruction of Yugoslavia through aerial bombardment of civilians and their infrastructure is a "humanitarian intervention."

One question looms. Why would banks, transnational corporations, and their political allies support an array of neo- liberal policies of "structural adjustment" whose net effect—through increasing poverty, warfare, and even genocide—is to repress demand so far that even exports from their own countries fall away? Why would capitalists destroy the foundations of their own wealth as well as the planet on which all life depends?

The answer to this is clear. They do it because they can reap huge rewards now. The approach of the beneficiaries of the current international system is après moi le deluge.