Facing Down A Gangster: Four measures a small country can take against the United States
I’ve been brain-storming about what a small state can do in an era where the US clearly can dictate terms within the world market. This thinking has been triggered by such recent events as the complete humiliation of the president of Bolivia, Evo Morales, in pursuit of the whistle-blower Edward Snowden; the coup in Egypt to overthrow the democratically elected government there through tactics not unlike those employed against the democratically elected government of Chile in 1972; and by the ongoing events in Greece, Spain, Ireland, Portugal and the so-called periphery of the euro-zone.
A small country like Bolivia, or Egypt or Greece can hardly expect to stand toe to toe with the US and its allies and trade blows. They typically do not have the economic, political or military power to confront the United States. This has led to the United States routinely ignoring their sovereignty, overthrowing their governments and sabotaging their economies.
These activities were perfectly captured by John Pilger, who argued the Morales incident was nothing but blatant gangsterism:
“The forcing down of Bolivian President Evo Morales’s plane – denied airspace by France, Spain and Portugal, followed by his 14-hour confinement while Austrian officials demanded to “inspect” his aircraft for the “fugitive” Edward Snowden – was an act of air piracy and state terrorism. It was a metaphor for the gangsterism that now rules the world and the cowardice and hypocrisy of bystanders who dare not speak its name.”
This has given rise to a sense of despair in face of Washington’s overwhelming power to determine social relations within the world market. Some like Russia’s Alexei Pushkov have even suggested Egypt and other Arab countries are not ‘ready for democracy’:
“The events in Egypt show that there can’t be a quick and gentle transition from an authoritarian regime to political democracy. There can’t be such a transition in the Arab East countries,” Pushkov told Interfax early on Thursday.
“This shows that democracy doesn’t work as a panacea primarily in countries that do not belong to the Western world. This is a very difficult, long and painful process affecting economic development and social conditions. In other words, the Arab Spring has so far led not to democracy but to chaos. We can see this in Egypt, in Libya, in Syria, and in Iraq,” he said.”
It seems to me that a every other country clearly is seen by Washington as a source of surplus value and nothing more. From Washington’s viewpoint, these states cannot be allowed to operate as a sovereign state any more than their fiat currencies can be treated like the dollar in international trade.
In contrast to the contempt shown by Alexei Pushkov toward Arabs, this is not a peculiarly Arab problem: we have witnessed in Spain, Ireland, Portugal and Greece the same sort of gangsterism employed to sacrifice the majority of these nation to United States and European Union interests that is evident in the Egyptian coup. How less developed countries can protect themselves from United States and European Union pressure, therefore, is a question penetrating right into the heart of the relatively advanced countries themselves. In all of these countries, the national capitalist classes are systematically sacrificing their respective working classes to save themselves.
Washington’s tentacles of control extend into these small nations through the very mechanisms the national capitalist class employs to maintain its own grip. As events in Europe, Egypt and Venezuela demonstrate, the antagonism between the working class and its national bourgeois class is aggravated by the relations between Washington and the country as a whole. The bourgeois class is thus trapped between its own working class and Washington and, in this position, will sacrifice the working class.
We know this; we have watched it happen in Europe; this is not a surprising conclusion. The question then must come down to how to prevent this and it can only be prevented by wiping out the national bourgeoisie entirely. Its social power, in all of its manifestations, must be broken. The working class must, for its own protection, wipe out all the social power of its capitalist class. Once the national capitalist class is gone or in any case, the working class still has to face Washington. It will be naked, and Washington will employ anything that remains (of the former capitalists’ own power) against the working class.
I think there are at least four measures smaller countries can take to protect themselves from this sort of bullying. The general principle is this: these smaller nations must sacrifice their own national capitalist class before this class sacrifices them. The aim of these measures are simple: Insofar as it is possible, leave nothing of the former national capital for Washington to absorb. Destroy the national capital entirely and divide it up among the working class. This means, destroy the national capital’s money, its state, its property and its surplus value.
Let me give examples of what this means, which will be controversial because it will be seen as capitulation to neoliberalist pressure.
It is not possible for a small state to dislodge the dollar as reserve currency, so to get rid of money, a small country should first get rid of its own. It should, in addition, shut down its central bank, and abolish all debt denominated in its currency and any other currency.
Obviously, it is impossible for the working class of a relatively backward nation to put an end to the dollar or the United States, but it can at least protect itself from the state capitalist who further dilutes the dollar’s purchasing power for its own ends. Shut down the Bolivian central bank and arrest its governors. Morales threatens to shut the American embassy — that is a meaningless gesture. The real American embassy in Bolivia is the central bank all the country’s real business is being managed by the central bank, and through it, by the Federal Reserve. Kill the central bank and arrest the banksters who run it.
What will be used for a currency if a country eliminates its own currency? All the other currencies in the world market, of course. Open the economy to every currency in the world market and let them fight it out. With the possible exception of the euro, all other currencies in the world market are mere tokens of the dollar. Which means they are merely derivative of Washington’s own domination of the world market, employed to further impoverish the citizens of the state issuing the national currency.
Look at it this way: When MMT says only the US is a sovereign money counterfeiter, it means all other nations use the dollar as their own currency standard. The small nation’s central bank simply runs a fractional reserve system based on the dollar rather than gold. It uses this fractional reserve system to move social resources to the state — and Washington can, working through this very mechanism, move those resource to the United States. The working class, in order to protect itself from its own state capitalist, should abolish this derivative monetary system.
If the national currency and the central bank has to go, it follows that the state itself has to go with those two. The goal cannot be (as activist parties like SYRIZA aim) to take state power, but to put an end to it. The moment you shut down the central bank and abolish the national money, this state no longer has access to sufficient revenue to operate. Above all, this means putting an end to the state power that is the representative of the national capitalist class to the extent possible. If this is not done, this state power will increasingly represent only the interests of Washington — as Egypt demonstrates. This means, above all, completely demobilize the military, destroy its weapons, absorb the soldiers back into the civilian labor force, to put an end to the role of the military and intelligence services of a country as the fifth column for United States’ national security interests.
The third step a small nation can take is to impose worker only representation on all boards of directors of corporations with a presence in the country. Shareholders would be completely excluded from any control over companies and this control placed in the hands of the workers. Ownership and management of companies is already effectively divorced, this would complete that divorce. It is absolutely critical that control of these corporations NOT be placed in the hands of the state or any other national centralized form.
As the events in Egypt show, if the state retains any control over the economy, it will use this control to sabotage the country. Once control of those corporations have been placed in the hands of the workers, they can themselves erect whatever means they find necessary to coordinate their activities in common. In no case should the state be allowed to produce any plan on their behalf or be allowed to construct a national economic plan to replace the market.
Since above we have just abolished all debts in the national and other currencies, we have freed up a large amount of surplus value that was going to service national debt and the state. But this is not enough: The way you really get rid of debt permanently, beyond simply wiping it out, is to make sure there is no surplus to repay any new debt. That can only be ensured if hours of labor are so short not enough surplus is produced to service debts. This surplus should be returned to the population in the only form it cannot become capital: free time.
The tendency in this case by Left activists might be to argue for an increase in wages in hopes the profits of the rich will be used to improve the living standards of the mass of society directly or indirectly through funding government services, However my research leads me to the conclusion that wages, no matter their amount, is always zero. Any increase in wages or state spending on human services under a fiat currency regime, where the currency is not pegged to a commodity money, is zero as well. We cannot be distracted by appearances in this situation: wages in a fiat system only serve to limit the consumption of the working class.
The problem is this: If you hand out wage increases or try to fund state services with fiat money, the monetary authority — be it national or the Federal Reserve in Washington — can dilute the purchasing power of the wages or state spending by counterfeiting money. The Left’s moronic obsession with higher nominal wages is the most egregious aspect of its failure to the working class. It is bad enough the working class falls for this, but then you have Leftists who deliberately and knowingly reinforce the delusion.
The only way the surplus value of the national capitalist can be transferred to the working class is through reductions in hours of labor.
The above measures are necessary to state openly since among some communists the idea persists that there can be an alliance with the national bourgeois class and the working class against Washington. Communism today is heavily infected with nationalist semtiments that lead to the wrong conclusions. I don’t think it is possible to create an alliance between the working class in smaller nations and their capitalists and in any case such an alliance is not advisable. I see this sort of argument operating in the case of Venezuela and other Latin American countries, but it is folly.
I want to emphasize this is not a matter of ideological purity on my part — there will be exceptions. My reasoning is based on the following experience:
First, the capital of this national bourgeois class is already being absorbed under Washington’s control. This is seen directly in the coordination of policy among central banks and it is evident in cooperation between militaries and intelligence services. It can also be seen in the role the Cyprus central bank played in cutting off Cyprus citizens access to their savings until the government submitted to EU demands. It can also be seen in the role the Egyptians oil ministry played in creating shortages of fuel in the country during the run up to the coup.
Second, even as this is being written efforts are underway to perfect the subordination of all national capitals to Washington through managed trade policies — which cannot by any means be labeled ‘free trade’.
While it is not possible for a small country to overthrow Washington’s domination of the world market by means at its disposal (and for this very reason) smaller countries must put an end to the social power of their own national capitalists.