>Here is today's ZNet Commentary Delivery from Robin Hahnel.
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>Here then is today's ZNet Commentary...
>
>------------------------------------------
>
>
>THE QUESTION OF IMPERIAL INTENT
>By Robin Hahnel
>
>Not so long ago the United States was widely viewed as having lost its
>global economic hegemony. As far back as the early 1970s President Nixon
>commissioned Peter Gary Peterson to head up a special commission to evaluate
>why the US position in the global economy was deteriorating. The
>commission's two-volume report published by the Government Printing Office
>in 1971 contained a long list of ways in which the US was losing its
>competitive edge to Europe and Japan. But most significantly, Peterson was
>so impressed with the Japanese economic model that he added a special
>appendix to the report titled "The Japanese Economic Miracle" in which
>Peterson literally salivated over what he described as the competitive
>advantages of different aspects of the Japanese economic system. He
>explained how their lifetime employment system, their business
>conglomerates, or Keritsu, (that included vertically integrated
>manufacturing companies, a large commercial bank and an export trading
>company,) their financial system (that permitted Japanese companies to
>operate with much higher debt/equity ratios yet less risk of bankruptcy than
>similar US companies,) and a highly efficient collaborative relationship
>between Japanese businesses, the Ministry of International Trade and
>Industry and the Bank of Japan (that facilitated long run international
>economic planning to penetrate and capture important world markets,) all
>provided Japanese companies with significant advantages over their US
>counterparts. In 1974 the British economist Andrew Schonfield published
>Modern Capitalism (Oxford University Press), a major intellectual tour de
>force in which he explained that there had always been two, not one, model
>of "capitalism." Besides the laissez faire model favored in Great Britain
>and the US in which the government was viewed as a policeman mediating
>conflicts between private parties, Schonfield convincingly demonstrated that
>there had always been a corporatist model favored, for example, in France
>and Germany, where the government was viewed as a major player responsible
>for coordinating the economy and shaping its pattern of industrial
>evolution. Schonfield went on to provide credible evidence for why he
>believed the corporatist model would prove better suited than the laissez
>faire model to the challenges of global competition in the late 20th and
>early 21st centuries. In the 1980s and 1990s South Korea, Taiwan, and other
>Asian countries imitated the Japanese version of corporatist capitalism with
>great success, producing the highly touted Asian economic miracle. And
>despite the fact that IMF, World Bank, and US officials labored tirelessly
>to perpetuate the myth that the Asian "tigers" were laissez faire success
>stories, the evidence is overwhelming that successful Asian economies during
>this period in fact pursued a corporatist, not a laissez faire strategy.
>[See Robert Wade, Governing the Market: Economic Theory and the Role of
>Government in East Asian Industrialization (Princeton University Press,
>1990), and Alice Amsden, Asian's Next Giant: South Korea and Late
>Industrialization (Oxford University Press, 1989)]
>
>There is no denying that the Asian economic crisis has taken the wind out of
>the sails not only of "Japan Inc.," but of other Asian "tigers" as well,
>which prior to 1997 posed strong challenges to US and European global
>economic supremacy. And the corporatist model is clearly in retreat in
>Germany and France as well. Whereas the collapse of the Soviet Union changed
>the world from a bipolar to a unipolar system of military power, the Asian
>financial crisis has changed the world from a tripolar into an increasingly
>unipolar system of economic power. It is interesting to ask if US/IMF
>sponsored policies leading up to the crisis, and policies imposed on
>stricken economies by the US and IMF after the crisis struck were: (1) part
>of a conscious strategy to clip the wings of increasingly troublesome
>economic competitors, (2) the accidental result of myopic ideological
>zealotry and opportunistic greed, or, (3) indeed, the best policies to
>strengthen East Asian economies that were really only "paper tigers" and
>transform them into more formidable global competitors. I will not bother
>here to present the case against the Wall Street/Washington consensus that
>liberalization followed by austerity was all about strengthening our East
>Asian competitors. Instead, let's consider whether US imperial competition
>as the millenium approaches is (1) relatively self-aware, or (2) merely
>unconsciously self-serving.
>
>Chalmers Johnson is President of the Japan Policy Research Institute in San
>Diego. He offered a blunt assessment titled "America's Free Trade
>Proselytizing is the True Root of What is Now a Global Crisis" in the Los
>Angeles Times (6/25/99).
>"After all the endless mouthing off in the pages of the English-language
>business press about East Asian's 'crony capitalism,' the lack of
>'transparency' in Asian stock exchanges, the 'no pain, no gain' logic of the
>IMF and how the Asian economic challenge to Anglo American capitalism had
>fizzled, we now know that none of these things had anything to do with the
>Asian - now global - economic crisis. Addressing what did cause the crisis
>is the main business of the leaders of the countries of East Asia as they
>reflect on what has happened to them over the past two years. Here's the new
>explanation as it is developing in seminar rooms from Seoul to Kuala Lumpur
>to Beijing. With the end of the Cold War, the United States decided it had
>to launch a rollback operation in East Asia if it was to maintain its global
>hegemony. The high-growth economies of East Asia had become the main
>challengers to American power in the region, and it was time they were
>brought to heel."
>
>"The campaign worked in two phases. First, a major ideological barrage was
>launched to soften up the Asians. The Americans mobilized famous professors
>of economics from their universities, who never once faced a 'market force'
>in their own lives, to preach the beauties of globalization; in this case
>meaning American economic institutions. These include total laissez faire,
>destruction of unions and social safety nets, staffing of regulatory
>agencies with retired financiers, indifference to the pay differentials
>between CEOs and the ordinary work force, moving manufacturing to low-wage
>areas regardless of the social costs, and totally unregulated flows of
>capital in and out of any and all economies. Ever since the Asian Pacific
>Economic Cooperation summit in 1993, the Americans hammered home to the
>Asians that they needed to 'open up' their economies in these ways. Then
>came phase two. Once the Asian economies had begun to 'deregulate' and were
>standing in the world marketplace more or less naked, the 'hedge funds' were
>let loose on them. These funds are actually huge concentrations of capital
>owned by very wealthy Western white men, who manipulate bewilderingly
>complex financial instruments called 'derivatives.' They usually locate
>their offices in offshore tax havens like the Cayman Islands and do
>everything in their power to avoid regulators or tax collectors in the
>so-called free market democracies. The funds easily raped Thailand,
>Indonesia and South Korea and then turned the shivering survivors over to
>the IMF, not to help the victims but to ensure that no Western bank was
>stuck with 'nonperforming' loans in the devastated countries."
>
>Obviously Chalmers Johnson is inclined toward a straightforward conspiracy
>theory. Muthiah Alagappa, a Malaysian scholar at the East-West Center in
>Honolulu is a little more polite: "The Asian crisis obviously strengthens
>the position of American companies in Asia." Jusuf Wanandi, head of a
>research institute in Jakarta is more alarmed: "All our stocks and companies
>are dirt-cheap. Foreigners may take over everything." While Prime Minister
>Mahathir Mohamad of Malaysia sounded the alarm in a televised address: "If
>we are not careful we will be recolonized." Nicholas Kristof who covered the
>Asian crisis for the New York Times is more agnostic but does not dismiss
>the conspiracy theory outright: "Many experts believe that one of the most
>far-reaching consequences of the Asian financial crisis will be a greatly
>expanded American business presence in Asia. The United States insists that
>the main beneficiaries of open markets will be local residents, and the US
>is not a predatory beast forcing its companies on Asia. But not everyone
>agrees. There is a growing backlash against what some nations regard as an
>American model of laissez faire capitalism, which rescues Connecticut hedge
>funds but sacrifices Indonesian children."
>
>Jeffrey Garten, now dean of the Yale School of Management, leaves no doubt
>that the conditions that gave rise to American business ascendance in Asia
>were not themselves, unplanned or accidental. He recalled that when he was a
>high ranking official in the Commerce Department and key member of the
>neoliberal "attack" team: "We pushed full steam ahead on all areas of
>liberalization, including financial. I never went on a trip when my brief
>didn't include either advice or congratulations on liberalization. Wall
>Street was delighted that the broad trade agenda now included financial
>services. There wasn't a fiber in the bodies of Mr. Rubin, Mr. Kantor, and
>the late Commerce Secretary Ron Brown - or in mine - that didn't want to
>press as a matter of policy for more open markets wherever you could make it
>happen."
>
>In many respects it matters little if the likes of Robert Rubin, Lawrence
>Summers, Stanley Fischer, and Alan Greenspan really know and understand what
>the effects will be of what they are doing. Nor does it matter much if
>mouthpieces like Bill Clinton, Tony Blair and Gerhard Schroeder believe
>their own rhetoric that liberalization and austerity is necessary to
>strengthen Asian economies, or know full well that the international
>economic policies they peddle weaken Asian competitors. The only thing that
>really matters is that we who oppose US corporate sponsored globalization
>understand that it not only is damaging the environment and aggravating
>global inequalities, it has also dealt US corporations most dangerous
>competitors in Asia a stunning body blow while handing US financial
>institutions and investors a gargantuan windfall gain. But just as the
>Pentagon Papers revealed a greater degree of self-awareness than most had
>suspected on the part of those who planned and carried out the US war
>against Vietnam, I believe as evidence trickles in from leaked Treasury
>Department and IMF memos we will also discover a greater degree of
>self-awareness on the part of those who orchestrated neoliberal
>globalization than most suspect at present. Speaking for myself, I am more
>convinced than I was a year ago that top policy makers believe very little
>of their own rhetoric about liberalization strengthening all economies and
>globalization raising the living standards of all, and are keenly aware of
>how their international economic policies have weakened international rivals
>of US business as well as aggravated global inequalities.