Very interesting Mark. A few remarks. First, I am not sure what Military Keynesianism means now. It began in an age of industrial armaments -- tanks, planes .... built in factories by lots of blue collar labor. Now it is electronics and high tech. Will a trickle down crank in or will you get the awful maldistribution typical of Silicon Valley? I am not sure.
Certainly, the bombing give Bush and his gang a green light to feed at the trough. Missle defense, capital gains cuts .... and no dem. has the spine to speak up.
I am not sure how deep Bush's support is. The students I encounter are mad, but confused.
In any case, this note certainly points pen-l in a direction I would like to see explored, although I don't believe at all that this was a CIA plot.
Mark Jones wrote: > > The idea has been expressed that the wtc attack opens the door to 'military > keynesianism'. This, it is argued, will be a more or less conscious, > premeditated response by the US and other major states, to the looming > recession/depression. Increased arms spending combined with enforced social > mobilisation will be a political response to economic crisis. This will go > in combination with an economic policy of deficit spending, forced > reflation and an end to 'market fundamentalism'. There will, it is said, be > renewed state intervention in the operation of markets. Thus the disaster > of 11 September will be turned to positive effect and the result will be to > ward off the economic implosion forecast by Wynne Godley and others (*"As > the Implosion Begins...? Prospects and Policies for the US Economy: A > Strategic View". www.levy.org. ) > > Related to this train of thought is the speculation that the CIA and/or its > political masters actually engineered the attacks, in order to rationalise > and catalyse necessary but stressful change. The state, some are saying, > was responsible for, or somehow organised the the suicide bombings on the > pentagon and wtc, as part of a process of orchestrating mass psychology, > introducing a police state etc. > > The military keynesian theory, and the CIA conspiracy theory, both make the > mistake of assuming that the state is more prescient and more powerful than > it is. They both also assume away many of the consequences and implications > of recent events. These consequences are so severe and so > easily-predictable that it is not credible to suppose that President Bush > would deliberately bring down these calamities on his own head. > > For one thing, the Bush 'war on terrorism' may turn out to really be > that: a war, one which the USA and its allies and supporters may easily lose. > > The stakes are monumental. First, the suicide attacks have demonstrated the > real extent of the vulnerability of modern industrial states. This is much > more serious than many people yet understand. We have seen press photos of > US popular reaction to the attacks: a pick-up truck with 'Nuke 'Em' painted > on the rear sums up widespread indignation. But in fact it is much easier > for terrorists to nuke the USA, then it is for the USA to nuke Afghanistan > or anywhere else in the Middle East. This truth has yet to dawn in people's > minds, evidently. (For more on this, see Matt Biven Nation article "Nuclear > Safety" at: > http://www.thenation.com/doc.mhtml?i=special&s=bivens_wtc_20010916 ) > (Bivens says: "What happens if a suicide bomber drives a jumbo jet into one > of America's 103 nuclear power reactors? What happens if a fire fed by > thousands of tons of jet fuel roars through a reactor complex--or, worse, > through the enormous and barely-protected containment pools of spent > nuclear fuel found at every such plant? These questions are even more > obvious and urgent than they may seem at first glance. Russian television > reported on Wednesday: "Our [Russian] security services are warning the > United States that what happened on Tuesday is just the beginning, and that > the next target of the terrorists will be an American nuclear facility.") > > However slow the general populace is to catch on, the US Administration > must by now be alive to the dangers. To judge from informed comment in > London and other European capitals, there is no doubt that political > leaders in other big capitalist states are now highly alarmed and are > terrified that any American miscalculation or over-reaction may have > calamitous, incalculable consequences. > > This danger of igniting a fearsome cycle of revenge attacks by itself may > explain why Bush's 'war on terrorism' may turn out to be a lot more > protracted and a lot less productive of satisfyingly atavistic imagery of > alleged Afghan terror-centres bombed to rubble, than many people suppose. > > The truth is that the civilian populations of all the advanced industrial > states are hostages penned inside extremely dangerous concentrations of > chemical, nuclear, biochemical and other volatile industrial complexes. And > all of us living in the west are vulnerable to attacks by toxic or > biological warfare agents as well as by suitcase nukes, planes launched at > reactor buildings etc. > > What's more, all the advanced industrial states are helplessly dependent > on energy imported from the Persian Gulf oil-producing states. Enormous > damage was done to Iraqi and Kuwaiti oilfields during the 1991 Gulf War. A > repetition might result in more permanent damage to the oilfields, and to > the overthrow of the Saudi regime, which would be an unthinkable strategic > catastrophe for western geopolitical interests. In short, the loss of > Persian Gulf oil,either because of physical damage to pipelines and > infrastructure, or because of the political collapse of Saudi Arabia, Egypt > and the Gulf states, would not only plunge the capitalist states into > permanent darkness, it might of itself deal such a crushing blow to the > global economic system that US hegemony would be fatally damaged. (Since > the US, Europe and Japan are 50-70% dependent on energy imports, such a > sequence of events would not merely destroy their economies, it would > represent a serious threat even to the biological survival of these nations). > > It is starkly clear that (a) the capitalist states are extremely vulnerable > to attacks which may of themselves result in devastating loss of life, > damage to property and destruction of complex and irreplaceable technical > and material networks, systems and productive assets. And (b), despite all > the bravura talk in western capitals about waging merciless war on > 'terrorism', in practice the hands of the military will be tied when it > comes to large scale military operations in the Middle East. Putting it > bluntly, they didn't get rid of Saddam last time. This time the stakes are > much higher, and the possible downside much steeper. > > If it is not at clear in what sense the capitalist states can 'win' the war > against terrorism, it is obvious that they can *lose*. The same processes > of concentration and centralisation of capital which have produced > prosperity and growth in the west, have also produced unprecedented levels > of technical and social vulnerability. Means of mass destruction are > cheaply and widely available. The vast outflow from the ex-USSR of nuclear > physicists, weapons and nuclear material since 1991 has seen ex-Soviet > military engineers, weapons system designers and nuclear bomb-makers > relocate to North Korea, Iran and many other places. In short, anyone who > wanted it, now has the bomb and the means of delivery, and some clearly, > have the will to use it. Thus the western world is more vulnerable than > ever in its history. Despite the vast military spending of the US and its > allies, capitalist states are revealed as colossi with feet of clay, > incapable of defending their wealth except at a vast and probably unpayable > price. > > Clearly, arguments from historical precedent no longer apply. For the first > time in 250 years, since the industrial revolution gave the west unlimited > military superiority over all its enemies and victims, the West has > decisively lost that military advantage, and we are therefore entering new > and uncharted waters. A new era in world history has been opened, and it is > clearly a transitional era, an epoch of contestation in which the > traditional advantage enjoyed by the capitalist states is no longer so > certain as it was. > > If it is clear that the Bush Administration has much more to lose than to > gain from recent events, it is also clear that military keyenesianism is > also not going to work. It may be tried, but it cannot succeed. People seem > to forget why keyenesianism was abandoned in the first place: because > it failed to deliver. After 1973, keynesian demand-management began to > fail. It was this that led to 'market fundamentalism' (firstly in its > monetarist guise) becoming the norm. The reason was simple: throughout the > long postwar economic boom, keynesian demand-management successfully > modulated the business cycle, smoothing out recessions and cyclical > overheating. But by the early 1970s deficit spending and so-called > pump-priming did not produce reflation, it only triggered runaway inflation > coupled with budgetary imbalances and the so-called fiscal crisis of the > state. Economic stagnation and growing dole queues continued to plague the > capitalist economies. This "stagflation" (inflation + stagnation) was > evidence of an underlying malaise. Since this underlying malaise has never > been cured, renewed attempts at keynesian manipulation of markets, deficit > spending and economic pump-priming can only produce palliative and > very-short term benefits, if any. > > The savage deflationary forces unleashed by market fundamentalism have > eaten away at the fabric of peripheral countries, destabilising and > devastating whole regions and directly leading to narrative of failed > states and barbarised societies which are the seedbeds of so-called > terrorism, are now attacking the core states themselves, the heartlands of > capitalism. > > In context, the phrase 'militarised keynesianism' is anyway a contradiction > in terms. The essence of John Maynard Keynes' philosophic outlook, and the > traditional rationale for keynesian policy in practice, was to create a > world of greater justice, greater solidarity and reduced social inequality. > Economies suffering from overproduction and a lack of effective demand were > to be stimulated by putting money in the pockets of the multitudinous poor. > A virtuous cycle of high employment, buoyant economies, and greater > equality and opportunity, were supposed to flow from these policies. In the > modern globalised economy, a keynesian approach ought presumably to involve > a massive redistribution of wealth, power and income from the North to the > South, from the rich capitalist states to the deprived and pauperised > peripheries. The architecture of this new and nmore enlightened form of > world capitalism would presumably rest upon a new social contract between > wealth and privilege on one hand, and poverty and social affliction on the > other. The Golden Billion living in the capitalist states would give up a > little of what they have, in order to stimulate economic growth and > relative prosperity in the peripheries. In exchange, the rich states would > gain not only renewed economic growth themselves and a greater demand for > their products, but the priceless gift of real security. The only real way > to 'defeat terrorism' is to remove its causes, and these lie in such > obvious social ills as poverty, unemployment, and the lack of justice, > freedom and opportunity of many in the South. Achieving a fairer, juster > world would be the real fruits of such a policy, if it could be applied. > But it cannot. There can be no new global social contract under capitalism, > no new globalised keynesianism, military or otherwise. Partly this is > because the political will does not exist. As Kissinger said today on a BBC > interview (paraphrasing), 'changing your policy as a result of terrorist > outrages would be to send out the wrong signal. The terrorists would only > be encouraged to commit more crimes.' The implication, if you buy into > Kissinger's warped logic, is that it is better to persevere in the same > evil, wrongheaded and unjust policies which led to social desperation and > the emergence of terrorism in the first place. But in any case, it is not > just a matter of there being no political will to implement keynesian > policies based on accepting a need for more social justice. There are more > fundamental reasons why it wouldn't work. In a nutshell, capitalist crisis > is not just because of overproduction and/or lack of effective demand; it > is also because radical constraints have emerged which block the > accumulation process. These are manifest in primary zones of production, > from food supply to water availability to lack of energy and other inputs. > The 'war on terrorism' itself is precisely a result of a growing global > conflict of increasingly-scarce petroleum reserves. The oil crisis has been > a constant factor since at least 1973, and it had and has implications for > all industrial societies, not just for capitalism. The collapse by half of > Soviet oil production after 1987 immediately led to the collapse of the > Soviet economy and the entire Soviet system. Absent the discovery of vast > and cheap new sources of energy supply, this bottleneck will remain. World > oil production has peaked or plateau'd. If social justice means growth in > China, India and elsewhere, then it is already unattainable. If keynesian > policies were applied on a global scale and with the intention of uplifting > the global economy and creating new prosperity in the so-called developing > world, the only possible result would be and inflationary debacle and a > still more serious slump. > > 'Military keynesian' is anyway not premised on any such enlightened social > programme: its core idea is to wage annihilatory war on the poor of the > world. It is a programme of black and vengeful nihilism, it is the ultimate > logic of exterminist capitalism which has nowhere else to go, which is at > the end of its tether, which is locked in its own dark nightmare and must > be liberated from without (as has happened more than once before in the > history of capitalism), because it cannot liberate itself: it will be > precisely the harrowed and hunted poor of the world who will have to > liberate us all from exterminist capitalism. > > Keynesianism in any case was never more than ersatz socialism, and never > got to the real roots of the problem. Today, the world economy is warped > warped by huge disproportionalities afflicting its technostructure, > networks and systems, and its social and material bases. Capitalism has > entered a profound historical impasse. The social, technical and economic > life of the big capitalist states, above all the USA, is radically > unsustainable and will have to be restructured from the roots. The urban > geography and social and normative order of the petroleum economy will have > to be rebuilt from the ground up. The political institutions and ruling > elites of the capitalist states are not capable of carrying thru this > transformation or even of understanding the need for it. They cling with > increasingly desperate stubbornness to a conceptual universe and a moral > order which is untenable and which is already collapsing. > > The shock of the coming transformations in these societies will be very > great and will produce huge and sometimes unbearable stresses and strains. > But not to embrace the necessity for change is to sleepwalk off a cliff, it > is to invite a final and terrifying catastrophe. > > Mark Jones
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