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The Conspiracy is Capitalism's Reviews > Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
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The Conspiracy is Capitalism's review
bookshelves: 1-how-the-world-works, 2-brilliant-intros-101, econ-imperialism, econ-market, econ-development
Jul 29, 2017
bookshelves: 1-how-the-world-works, 2-brilliant-intros-101, econ-imperialism, econ-market, econ-development
Read 2 times. Last read September 4, 2019 to September 17, 2019.
“Kicking away the ladder” or Enlightened Imperialism?
Preamble:
--Ha-Joon Chang was the first economist I read whose methodology seriously considered real world history (and not just that of the winners!)… Oh, how dismal is mainstream economics?!
--I’ve since explored beyond Chang’s State Capitalism reformist lens, but he remains useful to learn from and challenge.
The Brilliant:
--“Kicking away the ladder”: do-as-we-say, not-as-we-do. Power cannot just sustain on direct violence; it is much more effective using abstraction to achieve manufactured consent. Thus, the brilliant abstractions of the “free market” and “free trade” to hide much of the real-world history:
i) Do-as-we-say: how poor countries were looted (much more can be said about this; after all, colonizers do not go to poor countries; they go to rich countries to plunder) and forced into dependency (i.e. markets “free” for underpaid riches to be plundered; prevented from organizing long-term strategies to become independent).
ii) Not-as-we-do: how rich countries, proclaiming and forcing (one-sided) “free market” and “free trade” on the poor, became rich with different rules: violent destruction of competition + strategic protectionism.
--Thus, this book is a soft, accessible intro to dispel mainstream economics' “free trade”/“free market” propaganda... soft as in holding your hands with that shiny, mainstream credibility (economist at University of Cambridge) while still with one foot within the mainstream paradigm (see later).
--Also excellent is the last chapter (“Lazy Japanese and thieving Germans”) exposing the fallacy of blaming cultural traits forunderdevelopment over-exploitation. I always welcome the clowning of stooges like Francis Fukuyama (The End of History and the Last Man) and Thomas L. Friedman (The World Is Flat: A Brief History of the Twenty-first Century).
The Adequate:
--Note the other side of accessibility:
1) Despite revealing the contradictory history of real-world capitalism, a reformist cannot escape the orbit of this paradigm. At worst, soft criticisms can fortify the walls of the status quo paradigm with its illusion of free, critical thinking (paraphrasing Chomsky: Necessary Illusions: Thought Control in Democratic Societies).
2) More in-depth concepts of “kicking away the ladder” are not explored (esp. the geopolitical economy of imperialism).
…Thus, this is a bridge you must cross and not get stuck on.
--While I question State Capitalism (i.e. real-world capitalism), I can see how Chang's biases given his life experiences living through South Korea’s rapid development from the ravages of Japanese imperialism + proxy civil war (US imperialism *cough, cough*) to an industrialized hi-tech nation (subsidized by US imperialism, see later). His real-world examples from a Development Economics perspective are certainly worth unpacking (trade history, foreign investments, public-private, Intellectual Property, Monetarism/inflation/interest rates, etc.)…
The Bad:
--OK, time to address State Capitalism vs. geopolitical economy (esp. imperialism). For someone who writes quite eloquently about:
i) Status quo bias (e.g. Ricardo’s Comparative Advantage trade theory conveniently assumes countries will stay at their current levels of technology, justifying the benefits of “free trade” while omitting the realities of the need for sovereign development to combat dependency/exploitation), and
ii) Power politics in understanding the wealth/poverty of nations
...remaining so resolute with State Capitalism eventually hits a wall.
--My dream class was “Economic Development” with Jim Glassman, who methodically deconstructs the limitations of the national boundaries around Development economics like Chang's. If colonial “kicking away the ladder” involved relations between countries (geopolitical economy), how can we assume economic development (even if “successful”) is merely within national boundaries (national state polities)? Once we re-apply geopolitical economy, we can no longer “externalize” processes like military destruction/financing/production/alliances.
...Imperialism comes roaring back; was it not State Capitalism that took nationalist “kicking away the ladder” competition to terrifying global-industrial scale, culminating in the 2 greatest wars in human history and the Cold War (which sure wasn't cold for Chang's South Korea)?
--The only solutions in the book (in the last pages) seem to be:
1) “Enlightened” power (with the only example being US post-WWII “Golden Age of Capitalism”)
2) A vague sense of (presumably political) democracy.
…We are still in orbit, ready for the economic crash (The Bubble and Beyond) and existential crisis (Nuclear War and Environmental Catastrophe).
Enlightened whitewashing and delaying crises:
--Chang suggests that the US’s post-WWII Marshall Plan/global plan was “enlightened” power, compared to the age of colonialism's unfair treaties. Firstly, we are to de-prioritize the Truman Doctrine (which was also an economic response to capitalist crisis, see later), the US's laundry list of imperialist global interventions to prevent 20th century decolonization achieving economic independence (including ironically the genocidal war on Korea).
-Washington Bullets: A History of the CIA, Coups, and Assassinations
-The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program that Shaped Our World
-Killing Hope: U.S. Military and C.I.A. Interventions Since World War II
...In fact, the enlightened US aid often came on the other side of military carnage! Japan's rapid re-industrialization was aided by US military contracts for destroying Korea. Next, South Korea's rapid industrialization was aided by US military contracts for destroying Vietnam/Laos/Cambodia. This is what happens when we apply a geopolitical economy lens to bring context to national development (we return to Glassman: Drums of War, Drums of Development: The Formation of a Pacific Ruling Class and Industrial Transformation in East and Southeast Asia, 1945-1980).
--It's only “enlightened” if you erase the other half of the imperialist arrangement, where countries (Korea/Vietnam/Laos/Cambodia, etc.) received the most intensive, genocidal bombings in human history. See Vijay Prashad (Struggle Makes Us Human: Learning from Movements for Socialism) on the "ideological censorship" of imperialism, with the illustrative case study of North Korea: https://youtu.be/6jKcsHv3c74
...Besides from spatial context (geopolitical), we must add temporal context (geography = space + time) to the post-WWII Golden Age of Capitalism. Capitalist US's “Roaring Twenties” (1920's) burst in the 1929 Great Crash, bringing down the global capitalist economy in the Great Depression. For a deeper Global South perspective beyond Western financial bubbles crashing Western stock markets, we need to consider the falling British global capitalist system (Capital and Imperialism: Theory, History, and the Present).
--The fraction of “enlightened” capitalists could not expand/continue FDR's New Deals response to the Great Depression enough to come close to resolving the depression in the US (let alone reviving the capitalist world) because that would be too close to socialism. Enough of the US capitalist class preferred barbarism (be it endless “free market” austerity thus endless depression, or fascism: see the fascist “Business Plot” against FDR: The Plot to Seize the White House: The Shocking TRUE Story of the Conspiracy to Overthrow F.D.R.).
--Capitalism features volatility (booms/busts, politely called “business cycles”); the creative destruction of unplanned competition disrupts all of society as businesses/workers/communities without warning and with unpredictable speed become obsolete to the needs of private profits. Thus, social dislocation occurs during both booms and busts of capitalism, making it another key feature of capitalism: The Great Transformation: The Political and Economic Origins of Our Time.
--This is perfect fodder for fascism, which takes advantage of capitalism's abstract crises by scapegoating on visible minorities/outcasts:
-Blackshirts and Reds: Rational Fascism and the Overthrow of Communism
-Discourse on Colonialism (fascism as colonial practices coming home)
-And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future
...Luckily for US capitalism, other countries spiraled into fascism and the subsequent imperialist competition ignited the greatest global war in human history (WWII); this provided booming new markets for arming global annihilation, finally a “creative destruction” large enough to wipe away the Great Depression/fall of British Empire's global capitalism.
--Rebuilding foreign markets after the end of WWII to purchase US surplus production was a necessity, since US feared falling back into another depression once the war market ended and the annihilated world could not pay back war debts (for more on US and war debts, see Super Imperialism: The Origin and Fundamentals of U.S. World Dominance).
--Thus, the permanence of the US military industrial complex to keep capitalism's irrational profit-seeking (rather than social needs-fulfilling) factories running; here we return to the Truman Doctrine, where the Cold War scare served to bail out "the near-bankrupt aircraft industry": Harry S. Truman and the War Scare of 1948: A Successful Campaign to Deceive the Nation.
--Furthermore, “economic growth” (GDP, measuring market transactions) is not synonymous with social development (social needs of health/community/environment) and vice versa (see the China vs. India comparison at the bottom of Capitalism: A Ghost Story). The “Golden Age” was not the “Gilded Age” because of improvements in distribution, brought about not by “enlightened” handouts but out of necessity:
i) Rise of the USSR alternative (life expectancy of 23.6 in 1945 war-time to 67.88 in 1965, an unheard of rise; pioneering social policies in public health, welfare, etc.)
ii) Sell capitalism at home through the welfare state compromise: domestic leftist gained popular support from leading the fight against fascism and the overall social mobilization of war.
iii) Sell capitalism abroad given decolonization process of Global South and threat of more Red revolutions.
...Chang, typical for reformists (i.e. within the status quo paradigm), focuses on the volatility of “Finance Capitalism” (i.e. blame post-1970's “Neoliberalism”: A Brief History of Neoliberalism), but what about Chang's Industrial Capitalism (including Military Industrial Complex) and the relationship between Finance and Production?
--Now, let’s consider structural crises. Chang can abstractly suggests 1970's Thatcher/Reagan/Neoliberalism “Financialization” ruined “Golden Age” Industrial Capitalism, but why then? After all, “Golden Age” policies constrained Wall Street Financial speculation (Bretton Woods global plan's capital controls, “financial repression”, etc.). Was it just hubris? Forgetfulness? Welfare state/unionism becoming too unmanageable for capitalism's required inequality? These are pertinent questions if there is any credibility to Chang's revival of State Capitalism “Golden Age” and actually sustaining it (the original post-WWII “Golden Age” barely lasted 2 decades).
...A deeper dive is needed, which I detail in reviews for:
1) Global Capitalism's reliance on imperialism (consider how decolonization's independence would challenge global prices!): the Patnaik power couple's Capital and Imperialism: Theory, History, and the Present
2) Global Capitalism vs. decolonization: Vijay Prashad's The Darker Nations: A People's History of the Third World
3) US surplus recycling: Varoufakis' The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
4) US military spending: Michael Hudson's Super Imperialism: The Origin and Fundamentals of U.S. World Dominance
5) “Neoliberalism” reviving capitalist class power/profits: Harvey's A Brief History of Neoliberalism
…Once we review the above, we see Chang’s capitalist “enlightenment”/“Golden Age”/“democracy” and imperialist militarism/inherent and abstract volatility are 2 sides of the same coin. Meaningful democracy is not periodic and expensive (i.e. bribed) political theater; democracy must be participatory, economic, and anti-imperialist (i.e. you can't let US/NATO assassinate participatory economic democracy such as decolonization's land reformers by fear-mongering communism, then install one-dollar-one-vote electoral “democracy”).
Preamble:
--Ha-Joon Chang was the first economist I read whose methodology seriously considered real world history (and not just that of the winners!)… Oh, how dismal is mainstream economics?!
--I’ve since explored beyond Chang’s State Capitalism reformist lens, but he remains useful to learn from and challenge.
The Brilliant:
--“Kicking away the ladder”: do-as-we-say, not-as-we-do. Power cannot just sustain on direct violence; it is much more effective using abstraction to achieve manufactured consent. Thus, the brilliant abstractions of the “free market” and “free trade” to hide much of the real-world history:
i) Do-as-we-say: how poor countries were looted (much more can be said about this; after all, colonizers do not go to poor countries; they go to rich countries to plunder) and forced into dependency (i.e. markets “free” for underpaid riches to be plundered; prevented from organizing long-term strategies to become independent).
ii) Not-as-we-do: how rich countries, proclaiming and forcing (one-sided) “free market” and “free trade” on the poor, became rich with different rules: violent destruction of competition + strategic protectionism.
--Thus, this book is a soft, accessible intro to dispel mainstream economics' “free trade”/“free market” propaganda... soft as in holding your hands with that shiny, mainstream credibility (economist at University of Cambridge) while still with one foot within the mainstream paradigm (see later).
--Also excellent is the last chapter (“Lazy Japanese and thieving Germans”) exposing the fallacy of blaming cultural traits for
The Adequate:
--Note the other side of accessibility:
1) Despite revealing the contradictory history of real-world capitalism, a reformist cannot escape the orbit of this paradigm. At worst, soft criticisms can fortify the walls of the status quo paradigm with its illusion of free, critical thinking (paraphrasing Chomsky: Necessary Illusions: Thought Control in Democratic Societies).
2) More in-depth concepts of “kicking away the ladder” are not explored (esp. the geopolitical economy of imperialism).
…Thus, this is a bridge you must cross and not get stuck on.
--While I question State Capitalism (i.e. real-world capitalism), I can see how Chang's biases given his life experiences living through South Korea’s rapid development from the ravages of Japanese imperialism + proxy civil war (US imperialism *cough, cough*) to an industrialized hi-tech nation (subsidized by US imperialism, see later). His real-world examples from a Development Economics perspective are certainly worth unpacking (trade history, foreign investments, public-private, Intellectual Property, Monetarism/inflation/interest rates, etc.)…
The Bad:
--OK, time to address State Capitalism vs. geopolitical economy (esp. imperialism). For someone who writes quite eloquently about:
i) Status quo bias (e.g. Ricardo’s Comparative Advantage trade theory conveniently assumes countries will stay at their current levels of technology, justifying the benefits of “free trade” while omitting the realities of the need for sovereign development to combat dependency/exploitation), and
ii) Power politics in understanding the wealth/poverty of nations
...remaining so resolute with State Capitalism eventually hits a wall.
--My dream class was “Economic Development” with Jim Glassman, who methodically deconstructs the limitations of the national boundaries around Development economics like Chang's. If colonial “kicking away the ladder” involved relations between countries (geopolitical economy), how can we assume economic development (even if “successful”) is merely within national boundaries (national state polities)? Once we re-apply geopolitical economy, we can no longer “externalize” processes like military destruction/financing/production/alliances.
...Imperialism comes roaring back; was it not State Capitalism that took nationalist “kicking away the ladder” competition to terrifying global-industrial scale, culminating in the 2 greatest wars in human history and the Cold War (which sure wasn't cold for Chang's South Korea)?
--The only solutions in the book (in the last pages) seem to be:
1) “Enlightened” power (with the only example being US post-WWII “Golden Age of Capitalism”)
2) A vague sense of (presumably political) democracy.
…We are still in orbit, ready for the economic crash (The Bubble and Beyond) and existential crisis (Nuclear War and Environmental Catastrophe).
Enlightened whitewashing and delaying crises:
--Chang suggests that the US’s post-WWII Marshall Plan/global plan was “enlightened” power, compared to the age of colonialism's unfair treaties. Firstly, we are to de-prioritize the Truman Doctrine (which was also an economic response to capitalist crisis, see later), the US's laundry list of imperialist global interventions to prevent 20th century decolonization achieving economic independence (including ironically the genocidal war on Korea).
-Washington Bullets: A History of the CIA, Coups, and Assassinations
-The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program that Shaped Our World
-Killing Hope: U.S. Military and C.I.A. Interventions Since World War II
...In fact, the enlightened US aid often came on the other side of military carnage! Japan's rapid re-industrialization was aided by US military contracts for destroying Korea. Next, South Korea's rapid industrialization was aided by US military contracts for destroying Vietnam/Laos/Cambodia. This is what happens when we apply a geopolitical economy lens to bring context to national development (we return to Glassman: Drums of War, Drums of Development: The Formation of a Pacific Ruling Class and Industrial Transformation in East and Southeast Asia, 1945-1980).
--It's only “enlightened” if you erase the other half of the imperialist arrangement, where countries (Korea/Vietnam/Laos/Cambodia, etc.) received the most intensive, genocidal bombings in human history. See Vijay Prashad (Struggle Makes Us Human: Learning from Movements for Socialism) on the "ideological censorship" of imperialism, with the illustrative case study of North Korea: https://youtu.be/6jKcsHv3c74
...Besides from spatial context (geopolitical), we must add temporal context (geography = space + time) to the post-WWII Golden Age of Capitalism. Capitalist US's “Roaring Twenties” (1920's) burst in the 1929 Great Crash, bringing down the global capitalist economy in the Great Depression. For a deeper Global South perspective beyond Western financial bubbles crashing Western stock markets, we need to consider the falling British global capitalist system (Capital and Imperialism: Theory, History, and the Present).
--The fraction of “enlightened” capitalists could not expand/continue FDR's New Deals response to the Great Depression enough to come close to resolving the depression in the US (let alone reviving the capitalist world) because that would be too close to socialism. Enough of the US capitalist class preferred barbarism (be it endless “free market” austerity thus endless depression, or fascism: see the fascist “Business Plot” against FDR: The Plot to Seize the White House: The Shocking TRUE Story of the Conspiracy to Overthrow F.D.R.).
--Capitalism features volatility (booms/busts, politely called “business cycles”); the creative destruction of unplanned competition disrupts all of society as businesses/workers/communities without warning and with unpredictable speed become obsolete to the needs of private profits. Thus, social dislocation occurs during both booms and busts of capitalism, making it another key feature of capitalism: The Great Transformation: The Political and Economic Origins of Our Time.
--This is perfect fodder for fascism, which takes advantage of capitalism's abstract crises by scapegoating on visible minorities/outcasts:
-Blackshirts and Reds: Rational Fascism and the Overthrow of Communism
-Discourse on Colonialism (fascism as colonial practices coming home)
-And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future
...Luckily for US capitalism, other countries spiraled into fascism and the subsequent imperialist competition ignited the greatest global war in human history (WWII); this provided booming new markets for arming global annihilation, finally a “creative destruction” large enough to wipe away the Great Depression/fall of British Empire's global capitalism.
--Rebuilding foreign markets after the end of WWII to purchase US surplus production was a necessity, since US feared falling back into another depression once the war market ended and the annihilated world could not pay back war debts (for more on US and war debts, see Super Imperialism: The Origin and Fundamentals of U.S. World Dominance).
--Thus, the permanence of the US military industrial complex to keep capitalism's irrational profit-seeking (rather than social needs-fulfilling) factories running; here we return to the Truman Doctrine, where the Cold War scare served to bail out "the near-bankrupt aircraft industry": Harry S. Truman and the War Scare of 1948: A Successful Campaign to Deceive the Nation.
--Furthermore, “economic growth” (GDP, measuring market transactions) is not synonymous with social development (social needs of health/community/environment) and vice versa (see the China vs. India comparison at the bottom of Capitalism: A Ghost Story). The “Golden Age” was not the “Gilded Age” because of improvements in distribution, brought about not by “enlightened” handouts but out of necessity:
i) Rise of the USSR alternative (life expectancy of 23.6 in 1945 war-time to 67.88 in 1965, an unheard of rise; pioneering social policies in public health, welfare, etc.)
ii) Sell capitalism at home through the welfare state compromise: domestic leftist gained popular support from leading the fight against fascism and the overall social mobilization of war.
iii) Sell capitalism abroad given decolonization process of Global South and threat of more Red revolutions.
...Chang, typical for reformists (i.e. within the status quo paradigm), focuses on the volatility of “Finance Capitalism” (i.e. blame post-1970's “Neoliberalism”: A Brief History of Neoliberalism), but what about Chang's Industrial Capitalism (including Military Industrial Complex) and the relationship between Finance and Production?
The real force that pushed history to breakneck velocity […] was not the share market. Share markets were simply not liquid enough to bankroll Edison-sized ambitions. At the turn of the 20th century […] neither the banks nor the share markets could raise the kind of money needed to build all those power stations, grids, factories and distribution networks. To get those vast projects off the ground, what was required was an equivalently-sized network of credit. Hand-in-hand, shareholding and technology led to the creation of shareholder-owned mega banks, willing to lend to the new mega firms by generating a new kind of mega debt. This took the form of vast overdraft facilities for the Thomas Edisons and the Henry Fords of the world. -Yanis Varoufakis, Another Now: Dispatches from an Alternative Present, emphasis addedCapitalism’s Inherent Crises?:
--Now, let’s consider structural crises. Chang can abstractly suggests 1970's Thatcher/Reagan/Neoliberalism “Financialization” ruined “Golden Age” Industrial Capitalism, but why then? After all, “Golden Age” policies constrained Wall Street Financial speculation (Bretton Woods global plan's capital controls, “financial repression”, etc.). Was it just hubris? Forgetfulness? Welfare state/unionism becoming too unmanageable for capitalism's required inequality? These are pertinent questions if there is any credibility to Chang's revival of State Capitalism “Golden Age” and actually sustaining it (the original post-WWII “Golden Age” barely lasted 2 decades).
...A deeper dive is needed, which I detail in reviews for:
1) Global Capitalism's reliance on imperialism (consider how decolonization's independence would challenge global prices!): the Patnaik power couple's Capital and Imperialism: Theory, History, and the Present
2) Global Capitalism vs. decolonization: Vijay Prashad's The Darker Nations: A People's History of the Third World
3) US surplus recycling: Varoufakis' The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
4) US military spending: Michael Hudson's Super Imperialism: The Origin and Fundamentals of U.S. World Dominance
5) “Neoliberalism” reviving capitalist class power/profits: Harvey's A Brief History of Neoliberalism
…Once we review the above, we see Chang’s capitalist “enlightenment”/“Golden Age”/“democracy” and imperialist militarism/inherent and abstract volatility are 2 sides of the same coin. Meaningful democracy is not periodic and expensive (i.e. bribed) political theater; democracy must be participatory, economic, and anti-imperialist (i.e. you can't let US/NATO assassinate participatory economic democracy such as decolonization's land reformers by fear-mongering communism, then install one-dollar-one-vote electoral “democracy”).
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Quotes The Conspiracy is Capitalism Liked
“free trade economists have argued that the mere co-existence of protectionism and economic development does not prove that the former caused the latter. This is true. But I am at least trying to explain one phenomenon - economic development-with another that co-existed with it - protectionism. Free trade economists have to explain how free trade can be an explanation for the economic success of today's rich countries, when it simply had not been practised very much before they became rich.”
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
“Britain also banned exports from its colonies that competed with its own products, home and abroad. It banned cotton textile imports from India ('calicoes'), which were then superior to the British ones. In 1699 it banned the export of woolen cloth from its colonies to other countries (the Wool Act), destroying the Irish woolen industry and stifling the emergence of woollen manufacture in America.”
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
“Ricardo's theory is absolutely right-within its narrow confines. His theory correctly says that, accepting their current levels of technology as given, it is better for countries to specialize in things that they are relatively better at. One cannot argue with that.
His theory fails when a country wants to acquire more advanced technologies so that it can do more difficult things that few others can do- that is, when it wants to develop its economy. It takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competition during this period of learning. Such protection is costly, because the country is giving up the chance to import better and cheaper products. However, it is a price that has to be paid if it wants to develop advanced industries. Ricardo's theory is, thus seen, for those who accept the status quo but not for those who want to change it.”
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
His theory fails when a country wants to acquire more advanced technologies so that it can do more difficult things that few others can do- that is, when it wants to develop its economy. It takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competition during this period of learning. Such protection is costly, because the country is giving up the chance to import better and cheaper products. However, it is a price that has to be paid if it wants to develop advanced industries. Ricardo's theory is, thus seen, for those who accept the status quo but not for those who want to change it.”
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
“The place to start is with a true history of capitalism and globalization, which I examine in the next two chapters (chapters 1 and 2). In these chapters, I will show how many things that the reader may have accepted as ‘historical facts’ are either wrong or partial truths. Britain and the US are not the homes of free trade; in fact, for a long time they were the most protectionist countries in the world. Not all countries have succeeded through protection and subsidies, but few have done so without them. For developing countries, free trade has rarely been a matter of choice; it was often an imposition from outside, sometimes even through military power. Most of them did very poorly under free trade; they did much better when they used protection and subsidies. The best-performing economies have been those that opened up their economies selectively and gradually. Neo-liberal free-trade free-market policy claims to sacrifice equity for growth, but in fact it achieves neither; growth has slowed down in the past two and a half decades when markets were freed and borders opened.”
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
― Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
Reading Progress
July 29, 2017
– Shelved
August 28, 2017
–
Started Reading
July 26, 2018
–
20.0%
"The level of propaganda that mainstream economics (esp. global trade) has achieved is astronomical. Just presenting a few historical case studies makes you sound like a heretic!"
August 1, 2018
–
20.0%
"The "kicking away the ladder" analysis of trade history was one of the first concepts that brought clarity to my perception of the world. Still, Ha-Joon Chang remains a State Capitalist and it is difficult unpacking the extent of this "capitalism" and its contradiction with the principle we both share: democracy. Where are we in terms of economic democracy?"
August 11, 2018
–
Finished Reading
September 4, 2019
–
Started Reading
September 17, 2019
–
Finished Reading
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Yeah I can see your logic, it's definitely crucial to keep on top of technogical changes to anticipate opportunities and crises. I think Prashad's latest "Washington Bullets" will be a key resource in synthesizing the trajectory of imperialism up to the recent "hybrid war" techniques ensnaring Bolivia and Venezuela, both so key in the Pink Tide. I guess another concern is the domestic situation, I.e. tendencies for reactionary forces/Colour Revolutions. Just thinking of the sad state of India and Brazil, from previous roles in NAM/BRICS/Pink Tide...
I guess that's what you mean by the Pinochet option
Interesting you mention hybrid war. I'm thinking of doing a book on warfare from an anarchist perspective when I finish Exodus.
Remind me what your Exodus project is about, is this to do with the history of property rights? Nice, an anarchist perspective on warfare would be really interesting given anarchism's critiques of State violence. And leapfrogging is also an excellent topic I'd like to learn more about in the age of fossil capitalism
The latest C4SS research paper I did was on the property rights thing. Exodus is on the shift from Old Left mass-based and ruptural strategies for postcapitalist transition to horizontalist and interstitial strategies.
Ah looks like I have plenty of readings and discussions lined up. I just need to clear off all these ongoing readings for once, just finishing up Chris Harman's People's History of the World, quite interesting seeing him apply historical materialism with Trotskyist characteristics to world history...
Thank you for the great lesson-within-a-book-review. Can you help me understand where the term neoliberalism came from? Why is it called liberal when it seems to be loved by conservatives? What about it is neo? Thanks.
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Rakesh wrote: "Thank you for the great lesson-within-a-book-review. Can you help me understand where the term neoliberalism came from? Why is it called liberal when it seems to be loved by conservatives? What abo..."Great topic, Rakesh! Let's unpack this step by step:
1) First, we have to consider the context of these labels. "Conservative" and "liberal" (especially in popular, modern Americentric use) refer more to mainstream politics, more specifically the limited range of mainstream political theatre (ex. Democrats vs. Republicans) with all its surface-level identities (more crude exploitation vs. limited welfare, crude nativism vs token multiculturalism, stagnant cultural hierarchy vs. cultural acknowledgement of change, etc.).
2) Thus, economics is just assumed as capitalism.
Note: in the real world, capitalism is always State Capitalism, as the State creates and enforces capitalist property rights/capitalist markets esp. labour market, land market, money/finance markets (must be enforced since capitalism is not "human nature" and is resisted).
...Furthermore, complex economies require complex planning/social power struggles rather than simply relying on market supply/demand signals that somehow magically equilibrates (ex. multinational corporations operate internally via complex social relations governed by hierarchy, not market signals).
...So, when "conservatives" and "liberals" do debate "economics", it is more rhetoric than substance. "Regulation"/"deregulation" rhetoric is simply how much compromise needs to be made for those lacking capitalist property rights. "Free market"/"free trade" still involve massive planning bureaucracies (WTO/IMF/World Bank/Wall Street/City of London/military industrial complex for surplus recycling, etc).
3) Now, "Neoliberal" is used in a critical economics context (i.e. practitioners rarely call themselves that lol!). Here, "liberalism" is more synonymous with capitalism/bourgeois revolution, whereas "conservativism" may be the more reactionary wing tied to feudalism/monarchy/landed property etc. Of course, as capitalism evolved it has complex interactions with prior forms of hierarchy, as we see today with Finance (usury) and Real estate (landlordism).
..."Classical" political economy (Smith, Ricardo) supported liberal markets vs. feudalism. Marx worked with Classical political economy frameworks (his unfinished "Capital" project) to reveal its exploitation of labour + crises tendencies, which combined with the actual crises of the time (ex. Great Depression of 1873) triggered liberal economics to reject Classical political economy (real world observations where framework includes classes/crises/labour theory of value) in favor of utopic economics.
...Thus, the Marginalist Revolution producing "Neoclassical" and its side-kick "Austrian" economics. Such ideas have existed of course (Marx distinguished "vulgar economists" from Classical Smith/Ricardo after all), but now it became mainstream economics.
...Then, the Great Depression of 1930s happened, and Keynes moved away from Neoclassical economics which omitted crises to produce Keynesisan economics (which got neutered into simply State counter-cyclic spending and full employment policies). Once this ran into crises in 1970's, reactionary utopic economics was revived, thus "Neo" in "Neoliberal".
...I like to think the "liberal" part reflects the political project (Thatcher/Reagan/Pinochet/Clinton/Blair/Yeltsin etc.) while its academic ivory-tower economics (Neoclassical/Austrian) continued with its utopic fantasies. Of course, certain ideologues connected the two (Milton Friedman).
Says a lot that the "golden age of capitalism" was when capitalist countries were forced to compromise with watered-down socialist policies.
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John wrote: "Says a lot that the "golden age of capitalism" was when capitalist countries were forced to compromise with watered-down socialist policies."It's absolutely crazy how successful socialism is in the real-world. Even with all of imperialism's sanctions and sabotage, how USSR had such tremendous rises in life expectancy esp. after WWII. And I always quote the following because it's by capitalist reformers (so still with problematic assumptions on famine research):
--Consider the comparison made in the book Hunger and Public Action; note: the authors are ideologically liberal (economically), thus pro-capitalist (with reforms)! However, they are honest enough with their empirical research where some social conditions they simply cannot ignore (similar with public health researchers, etc.):
1) China’s dramatic rise in life expectancy occurred prior to its 1979 market liberalization’s economic growth:
In fact, it seems fairly clear that the Chinese growth rate was not radically higher than that of India before the economic reforms of 1979, by which time the tremendous surge ahead in health and longevity had already taken place. In the pre-reform period, agricultural expansion in particular was sluggish in China, as it was in India, and the dramatic reduction in hunger and undernourishment and expansion of life expectancy in China were not ushered in by any spectacular rise in rural incomes or of food availability per head. […]
This is indeed the crucial point. The Chinese level of average opulence judged in terms of GNP per head, or total consumption per capita, or food consumption per person, did not radically increase during the period in which China managed to take a gigantic step forward in matters of life and death, moving from a life expectancy at birth in the low 40s (like the poorest countries today) to one in the high 60s (getting within hitting distance of Europe and North America). [p.208]
2) China’s focus on social support (i.e. social needs, i.e. socialist policies):
As far as support-led security is concerned, the Chinese efforts have been quite spectacular. The network of health services introduced in post-revolutionary China in a radical departure from the past—involving cooperative medical systems, commune clinics, barefoot doctors, and widespread public health measures—has been remarkably extensive. The contrast with India in this respect is striking enough. It is not only that China has more than twice as many doctors and nearly three times as many nurses per unit of population as India has. But also these and other medical resources are distributed more evenly across the country (even between urban and rural areas), with greater popular access to them than India has been able to organize.
Similar contrasts hold in the distribution of food through public channels and rationing systems, which have had an extensive coverage in China (except in periods of economic and political chaos, as during the famine of 1958-61, on which more presently). In India public distribution of food to the people, when it exists, is confined to the urban sector (except in a few areas such as the state of Kerala where the rural population also benefits from it, on which, too, more presently). Food distribution is, in fact, a part of a far-reaching programme of social security that distinguishes China from India. The impact of these programmes on protecting and promoting entitlements to food and basic necessities, including medical care, is reflected in the relatively low mortality and morbidity rates in China. [p.209]
3) Despite China’s Great Famine, how do life-expectancies compare?
Finally, it is important to note that despite the gigantic size of excess mortality in the Chinese famine, the extra mortality in India from regular deprivation in normal times vastly overshadows the former. Comparing India's death rate of 12 per thousand with China's of 7 per thousand, and applying that difference to the Indian population of 781 million in 1986, we get an estimate of excess normal mortality in India of 3.9 million per year. This implies that every eight years or so more people die in India because of its higher regular death rate than died in China in the gigantic famine of 1958-61. India seems to manage to fill its cupboard with more skeletons every eight years than China put there in its years of shame. [p.214-215]...Note: furthermore, stellar radical political economist Utsa Patnaik disputes the famine death methodologies used on China's famine cited by the liberal authors: search for the article "Revisiting Alleged 30 Million Famine Deaths during China’s Great Leap"
So yes, we have socialism for the rich and extractive exploitation for the rest of us. I fully understand what Kevin A.C says about real capital ie property can't be moved around in the way that money can be and therefore we can legislate to own property in a different way. I don't fully buy in to what Kevin says about the threat of invasion and self-defense despite the fact that the US lost wars in Vietnam and Afghanistan are and it looks like Russia are not doing too well in Ukraine either. For me the big issue is that manufacturing is now international. Much of UK manufacturing is carried out in China. In fact my understanding is that UK wealth is primarily extractive. And therefore much of the goods that we can cosume are imported. That puts us back to the problems of communism in one country. The eastern block were not able to manage it successfully in the significant number of countries. Accepting that much of that was in fact state capitalism.
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(last edited Jan 14, 2023 01:55AM)
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Steve wrote: "So yes, we have socialism for the rich and extractive exploitation for the rest of us. I fully understand what Kevin A.C says about real capital ie property can't be moved around in the way that mo..."Great topics Steve! They got me revisiting numerous prior ideas, so below is more musings for a general audience rather and not a rant directed at you :)
RE: "I don't fully buy in to what Kevin says about the threat of invasion and self-defense despite the fact that the US lost wars in Vietnam and Afghanistan are and it looks like Russia are not doing too well in Ukraine either.
--This is crucial for conceptualizing imperialism beyond vague notions of asymmetry and elitist narratives, so let's carefully unpack:
1) Different levels of war-aims:
i) I detect the assumption that Vietnam/Afghanistan "won", therefore imperialist threats are less significant. Both were/are absolutely devastated ("bombed back to the Stone Age") in ways the US (as the supposed "loser") cannot even imagine. Rural societies with their agricultural land destroyed/poisoned for generations, where guerilla warfare meant the entire society was on the front lines of combat. Society (let alone socialism) cannot be built by the redistribution of poverty and trauma.
ii) Chomsky makes this point too: US's utopic/rhetorical war-aim may be to effortlessly neutralize all dissent and implement a passive, cosmopolitan, free-market neocolony. However, this never works (because human communities seek dignity and autonomy, especially when inspired by other decolonization revolutions).
iii) Beneath the utopic war-aim are real-world war-aims, where the crucial baseline is prevent viable competition/alternatives. Chomsky stresses that this US war-aim was victorious vs. Vietnam (and in many places, given US's extensive foreign policy), i.e. others in the Global South seeking decolonization will not see "winners" Vietnam/Afghanistan as viable alternatives. Southeast Asia's decolonization movements have been set back generations; many have never recovered (Indonesia famously had the largest non-ruling communist party in the world before the CIA-backed "Jakarta Method" mass-murders). We can apply this to the "Middle East" as well. Once again, it may not a passive, cosmopolitan, free-market utopia. But viable independence (especially secular nationalism/regionalism, a great competitive threat) has been derailed (Nasser/Mosaddegh/Qasim/Gaddafi, etc.). In fact, even Naomi Klein, whom I have critiqued as too tepid with socialism, makes this case in The Shock Doctrine: The Rise of Disaster Capitalism: disasters, far from being merely "defeats", prevent alternatives and can be profitable.
2) Class interests:
i) Cost of empire (on the working/poor): wars are not merely nation vs. nation (US vs. Vietnam, US vs. Afghanistan). Of course I appreciate Michael Parenti trying to frame imperialist wars as the "cost of empire", but the emphasis is this cost is not on the rulers but on the working/poor of the empire, i.e. working/poor children recruited to die in foreign wars not for national safety/prosperity but for private profits. The cost is direct trauma/death, without social care when they return, while spreading violence against social care abroad, killing the innocent and fermenting long-term blow-back.
ii) Profits of empire: these are victories for decision-makers (War is a Racket: The Antiwar Classic by America's Most Decorated Soldier), on top of the real-world war-aims mentioned earlier. Of course I disagree with their capitalist/imperialist logic and see this annihilationist path as unsustainable, but the wealthy will gorge on short-term victories and be the last to suffer in crises unless they are directly challenged.
...We can apply the above to the following, which seems to mix class interests: "For me the big issue is that manufacturing is now international. Much of UK manufacturing is carried out in China. In fact my understanding is that UK wealth is primarily extractive. And therefore much of the goods that we can cosume are imported. That puts us back to the problems of communism in one country."
...Who is "us"?
i) Costs of imperialism (on domestic working/poor): agreed on the issue of social dislocation like deindustrialization's "deaths of despair", gentrification from asset price inflation ("primarily extractive") esp. real estate, fragile supply chains during crises, etc. Still, capitalism is contradictory: global wage exploitation is chasing the lowest costs, so we receive cheapened goods, and the "middle class" is a bought-off buffer. It is precisely Western imperialism that forces the flow of cheapened goods to the Global North rather the Global South feeding themselves and building autonomy, thus imperialism is the opposite of "the problems of communism in one country". If we end imperialism, then yes; we cannot survive propping up the greatest inequality/parasitism in human history without imperialism. However, I support ending imperialism, even for the Global North, because the Global North's class interests diverge/conflict. For working/poor, this is an opportunity to also end the extreme parasitism, rebuild local production/financing (revive community autonomy) rather than rely on imperialist transnational corporations/Wall Street, build resilience and possibly survive ecological/nuclear disaster, and of course end the super-exploitation of the Global South poor.
ii) Profits of imperialism: top Western capitalists are accumulating historic power. Why take on all the risks of production when you can outsource this onto Global South subcontractors, get them to ruthless compete for tiny margins of profit (ex. Foxconn), while Western capitalists rack up much the largest margins through rent-seeking ("extractive") intellectual property (ex. Apple)?! Once again, thank goodness there are contradictions to capitalism/imperialism so it is not eternal. However, it's difficult to view a gorging parasite as the loser.
Steve wrote: "So yes, we have socialism for the rich and extractive exploitation for the rest of us. I fully understand what Kevin A.C says about real capital ie property can't be moved around in the way that mo...""socialism for the rich and extractive exploitation for the rest of us", that's a lot of words to say "capitalism". As mentioned earlier, the exceptions come from watered-down socialist policies.
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John wrote: "Steve wrote: "So yes, we have socialism for the rich and extractive exploitation for the rest of us. I fully understand what Kevin A.C says about real capital ie property can't be moved around in t..."RE: "socialism for the rich and extractive exploitation for the rest of us"
--While I can appreciate the short-term benefits of pointing out this hypocrisy (I remembered Bernie using this quite a bit as a middle ground to communicate with Americans with mental blocks with the terms "socialism" and "capitalism"), I am concerned with its long-term limitations:
i) As a leftist, I can't encourage more slandering of the term "socialism" (i.e. organizing/planning for social needs).
ii) This still can get co-opted by the fallacy of "socialism = government" + "capitalism = free market", because "socialism" here implies government "interference" (esp. bailouts/subsidies) for the rich, which free market fundamentalists will complain as "corporatism" rather than "capitalism".
...To be fair, I can't think of many better one-liners to describe capitalism; I'm always worried of the internet communication/meme culture where context/definitions are bypassed in favour of confirmation bias by supporters and immediate disagreement by dissenters :/
I guess it's similar with the question of using the hammer and sickle imagery today. It depends on the context, and if we are staying on the level of symbols then we do not seem to be achieving much even if there is a positive response.
John wrote: "I guess it's similar with the question of using the hammer and sickle imagery today. It depends on the context, and if we are staying on the level of symbols then we do not seem to be achieving muc..."--I don’t yet have strong opinions on symbols, which indeed seem to reside in the shallow (yet not inconsequential) game of public relations which the capitalist political theatre operates in (liberal capitalism co-opting identity politics, and conservatives getting triggered).
--In an episode of “Auxiliary Statements” interviewing “From Alpha to Omega”, I remember them opining how the sickle is an outdated symbol for the industrial West. Sure, I understand a tiny percentage of the West work directly in agricultural production. However:
i) Even our national food system from production to distribution is still a sprawling mess, and clearly an essential service/industry.
ii) Furthermore, how can we rely on national borders when our food system is so global, where the global peasantry/pastoralists/Indigenous peoples still make up so much of the “periphery” (A People’s Green New Deal).
iii) Should a socialist/communist symbol merely inherit the conditions of capitalism (i.e. peasants and proletariat)? I can understand the logic of uniting the exploited under capitalism, but what about a constructive symbol for the future? Thus, the sickle may not be appropriate for this reason. I think a symbol representing a communist relationship with nature seems foundational, ex. a symbol of caretaking/ecological care.
…This ties in with the anthropology of the peasantry vs. other ways of relating with nature.
…Also reminds me of a medical article I’ll need to read: “Ecological caring—Revisiting the original ideas of caring science”.
…And Jason W. Moore would stress the dialectical relationship between society and nature where we are producing each other.
Of course, there was always the threat of the international credit system cutting them off in the future. But that threat is diminishing to the extent that technological development towards smaller, more ephemeral, and cheaper production machinery reduces the need for external capital investment, and bootstrapping/leapfrogging become possible through open-source micromanufacturing tech.
A number of post-colonial countries simultaneously -- and in conjunction -- restoring Western-owned land, mineral and oil resources to the commons, expropriating all factories, repudiating all debt, nullifying all intellectual property claims, and encouraging horizontal credit systems and micromanufacturing, could make serious improvements in their standards of living despite total "interdict" from transnational capitalist finance.
That still leaves the Pinochet option, obviously. But hopefully the move towards cheap area denial weapons and the shift in advantage towards the strategic defensive will reduce that threat.