Niall Ferguson on Kissinger's World Order [Part Four]

Niall Ferguson on Kissinger's World Order  [Part Four]

Thomas Riggins

Ferguson now criticizes the ideas expressed by Obama in his New Yorker interview. Obama said a “new equilibrium” could be reached if Iran would be more cooperative so it could work with the Sunni Gulf States [what about Saudi Arabia and the US being more cooperative vis a vis Iran as well] and if the Palestinian  “issue” could be “unwound’’ [all the US has to do to do this is put some real pressure on Israel to follow international norms and obey UN resolutions]. Then Israel could work towards alliances or normal relations with the Sunni states [why not with the Shia as well; all Israel’s problems stem from its oppression of the Palestinians].

Ferguson rejects Obama’s ideas because, he asks, why would the states in the region cooperate to produce equilibrium when any of them might attain “hegemony” over the others. This is a really lame objection to Obama’s ideas— it stems from the knee jerk reaction that anything Obama does or says must be criticized. There is no evidence that any of the states in the region is striving to attain “hegemony” — they are all trying to defend themselves and their internal status quo but their own internal policies generate opposition which they all try to lay on their neighbor’s doorstep. The only country trying to exert hegemony in the region is the US as the following quote from Kissinger reveals (which Ferguson thinks is directed at Obama): 

“Even were such a constellation [equilibrium] to come to pass, it could only be sustained by an active American foreign policy. For the balance of power is never static; its components are in constant flux. The United States would be needed as a balancer for the foreseeable future. The role of balancer is best carried out if America is closer to each of the contending forces than they are to each other …. America can fulfill that role only on the basis of involvement, not of withdrawal”

This is just a modernized version of the old British policy of divide and rule which was used to pacify India and other colonial regions. It is ridiculous because the US is one of the contending parties itself and it can’t be a balancer because all its policies are imbalanced in favor of Israel and its own imperial economic interests in the region. There will never be peace in the region as long as the US is actively involved. 

Why anyone takes Kissinger seriously is a mystery. Of those he has influenced it can truly be said: “Devastation and destruction are in their highways. They do not know the way of peace, And there is no justice in their tracks; They have made their paths crooked, Whoever treads on them does not know peace.’’

At this point Ferguson moves from considering Kissinger’s views on the Middle East to his views on developments in Asia. Here again Kissinger (and Ferguson) demonstrate their (and presumedly the foreign policy establishment’s) complete

lack of understanding of what is happening in the world and why.

Kissinger sees two balances of power forming in Asia; one in the south the other in the east. Here is his quote: “Under contemporary conditions essentially two balances of power are emerging: one in South Asia, the other in East Asia. Neither possesses the characteristic integral to the European balance of power: a balancer, a country capable of establishing an equilibrium by shifting its weight to the weaker side.”

It is the rising power of China in East Asia that is problematic. Kissinger attempts to understand balance of power possibilities in this region by harking back  to nineteenth century European balance of power deals. He writes, “the United States is an ally of Japan and a proclaimed partner of China [they are actually rivals] — a situation comparable to Bismarck’s  when he made an alliance with Austria balanced by a treaty with Russia.” 

This was a complex secret treaty arrangement whereby Russia and Germany would remain neutral if one of them went to war with a third party— unless France was attacked by the Germans or Austria-Hungary by the Russians. This treaty was signed in 1887 and Kissinger says its later abandonment led to World War I. The question is, can such a secret treaty (that will protect Japan) be made with China? [That is all we need, a secret treaty between the US and China of which the American people will be ignorant!— and Wiki Leaks is the enemy?]. 

The only thing that would prevent this secret deal, at least on the US side is, Kissinger says, according to Ferguson, the “pernicious legacy of Woodrow Wilson.” This legacy, Kissinger writes is “an elevated foreign policy doctrine unmoored from a sense of history or geopolitics.”  Wilson gave Americans a false sense of security in the belief that they could avoid foreign entanglements due to his views on collective security. 

The only thing “pernicious” here was the US’s failure to join the League of Nations and make it robust enough to have prevented Italian and German aggression, not Wilson’s ideas. Here is a quote from Kissinger illustrating his critique of Wilson (the ellipses are due to Ferguson):

“Collective security … is a legal construct addressed to no specific contingency. It defines no particular obligations except joint action of some kind when the rules of peaceful international order are violated. In practice, action must be negotiated from case to case …. The idea that in such situations countries will identify violations of peace identically and be prepared to act in common against them is belied by the experience of history …. An alliance [by contrast ] comes about as an agreement on specific facts or expectations. It creates a formal obligation to act in a precise way in defined contingencies. It brings about a strategic obligation fufillable in an agreed manner. It arises out of a consciousness of shared interests, and  the more parallel those interest are, the more cohesive the alliance will be.” 

This quote shows why we need a supra-national organization to enforce world order, an ideal that Bertrand Russell advocated for many years. One of the reasons world order collapsed the way it did in the wake of World War I may have been the weakness of the League of Nations not the concept of collective security. 

There are design flaws in the UN which prevent it from being an effective supra-national origination that could maintain world order. These have to do with the Security Council with its veto wielding five permanent members who think of the UN as an organization to further their particular national (i,e, class) interests. The US, especially, as the number one rogue nation, ignores the UN and world opinion in general whenever it decides its own interests trump what the majority, even when the overwhelming majority of humanity, thinks it is violating what is right and decent (its treatment of Cuba [recently modified for the better], its oppression of the Palestinians, its unilateral interventions in other countries, its support of fascist regimes repressing their own people, its use of the veto to defy world opinion, are only the most prominent examples that come to mind.) This behavior is due to the use of alliances and treaties so beloved of Kissinger rather than honestly working within the UN framework as it was envisioned to maintain a peaceful world order through collective security. [The larger explanation for US behavior is to be found in Lenin’s Imperialism the Highest Stage of Capitalism, but that is a different review all together.]

Ferguson says that in all of Kissinger’s works there is a recognition that realpolitik doesn’t always work and that successful foreign policy can’t be based solely on pragmatism. Kissinger says that we must make “conjectures” when we engage in making foreign policy we “need to gear actions to an assessment that cannot be proved when it is made.” In other words Kissinger advocates a foreign policy based on pragmatism plus folly. It was surely folly to assess that the Vietnamese would welcome the US and reject Ho Chi Minh, that Iraq was responsible for 9/11, that we could transplant “democracy” to the Middle East and to Afghanistan, that Fidel would be overthrown by his own people if we invaded at the bay of Pigs, that Allende was a soviet style communist— the list goes on.

Ferguson thinks Kissinger is a mixture of idealist and realist, and more similar to the idealism expressed in Kant’s essay Perpetual Peace than the realism of Machiavelli. I don’t think anyone reading Kant would conclude that Kissinger was anything other than the thug and goon type of statesman Kant was horrified by and who was portrayed so accurately by Christopher Hitchens in The Trial of Henry Kissinger.

In our next, and last, installment we will look at Kissinger’s views on American “idealism” as expressed more in his actions than his words.

Lenin: State and Revolution: Chapter 5 - Withering Away the State (Part Three) -- Review

Thomas Riggins

Chapter 5 of State and Revolution  has a brief introduction and four sections. Part Three of this review covers section four. 

4. Higher Phase of Communist Society

This is a very important section and should dispel many incorrect notions about the nature of socialism, the level of development towards communism in the former and current socialist states, and the possibility of creating any kind of society that brings freedom and justice to humanity as long as capitalism exists and a state is necessary to regulate social life.

This section is an extended commentary by Lenin on the following quote from Marx’s Critique of the Gotha Programme: “In the higher phase of Communist society, when the enslaving subordination of individuals in the division of labour has disappeared, and with it also the antagonism between mental and physical labour; when labour has become not only a means of living, but itself the first necessity of life; when, along with the all-round development of individuals, the productive forces too have grown, and all the springs of social wealth are flowing more freely— it is only at that stage that it will be possible to pass completely beyond the narrow horizon of bourgeois rights, and for society to inscribe on its banners: from each according to his ability; to each according to his needs.”

Lenin says that in light of this quote we can understand why Engels mocked those who conjoined the notions of “freedom” and “state.” Lenin frankly remarks that: “While the state exists there is no freedom.” There can only be relative degrees of repression. 

Today we are faced with the issue of increasing inequality between the citizens in the various states that presently exist on the world stage.  A recent book by Thomas Piketty (Capital in the 21st Century) has brought this issue to the forefront of political discussion. But nowhere in his discussion  does he deal with one of the major causes of social inequality. This is, Lenin points out “the antagonism between mental and physical labour” which is “one of the principal sources of modern SOCIAL inequality.” 

Under capitalism, as a matter of fact, inequality can never be eliminated. Some will always be “more equal than others.” This is because under capitalism the division of labor cannot be abolished. Nor can it be removed simply by eliminating the capitalists. It is “impossible to remove immediately by the mere conversion of the means of production into public property, by the mere expropriation of the capitalists.”  No one should be surprised  that social inequality existed in the former socialist states and still exists in countries today calling themselves socialist.

These states only provided or still provide the foundations for the possible future social conditions whereby this division could be eliminated. The development of industrial technique must attain a level where a super abundance of social wealth will be available for social distribution and universal education will eliminate the separation between physical and mental labor and the inequality that it breeds. Capitalism retards this growth in technique but the elimination of capitalism presents the possibility for its growth. 

How this future possibility will eventually present itself and exactly when such industrial growth will ever become so developed that all human beings can equally share in its benefits, Lenin informs us “we do not and cannot know.” But we do know there will be no “withering away of the state” before this time comes. One of the points of this  for us is that all criticism of socialist states, past and present, for not bringing about some sort of equalitarian worker’s paradise is based on ignorance of the actual social realities the founders of Marxism discussed  concerning the prospects of a future communist society.

Lenin points out that those bourgeois critics of socialism who sneer at its claims of liberation and label as Utopian dreams the ideals of a society of complete social equality in which people create social wealth according to their abilities and share it according to needs only display “their ignorance and their-self seeking defense of capitalism.”

Lenin calls them ignorant because while this highest stage of Communism has been discussed  by the founders of Marxism as a theoretical possibility “it has never entered the head of any Socialist to ‘promise’ that the highest phase of Communism will arrive.” This phase would require people quite unlike the common run of humanity today— people raised and educated to share and live lives of unselfish devotion to their common humanity as well as developing their individual talents and abilities with no desires to do so at the expense of other human beings. They would be living in a society capable of producing and sharing social wealth unlike any society of the past or present. Foreseeing this possibility is not the same as “promising” it will ever come about but it is a possible future to keep in mind and for which we can strive.

Until that day comes, when the state as we know it has “withered away,” Lenin says that “Socialists demand the strictest control, by society and by the state, of the quantity of labour and the quantity of consumption.” But this control has to begin not in the present society but with the overthrow of capitalism and the capitalist state— “a state of bureaucrats”— and its replacement by “a state of armed workers” (the Second Amendment will have some use after all).

Lenin has in mind soviets of  workers and soldiers as they appeared in Russia in 1905 and 1917. He thought of these soviets as models of real democracy (and by a dialectical inversion as a “democratic dictatorship”— a term which confounds many socialists today who have forgotten what is “dialectical” in dialectical materialism).

This new post capitalist state will turn all the citizens into workers of one gigantic syndicate or monopoly — “the whole state” — controlled and governed by the workers themselves by means of the soviets. The reality, however, turned out differently from Lenin’s ideas expressed here in chapter five. No actually existing socialist state was ever capable of existing as a state based on the “armed workers” and they all ended up with professional standing armies and administered  by bureaucrats. 

These states were handicapped by developing in industrial backwards, or devastated, areas and were never able to create enough social wealth to advance beyond the most rudimentary socialist beginnings  even though they brought about giant leaps forward in education, economic and social well being, literacy, and health to the populations living in them. The surviving socialist states are still grappling with many of these problems while simultaneously furthering the well being of their citizens.

Lenin wants to be clear on the scientific difference between Socialism and Communism. Socialism is the first and lower phase of Communism-- but it is not full Communism. Socialism has succeeded in turning the means of production, formerly owned and controlled by capitalists, into socially owned public property. This is technically "Communism" but it is not completely evolved mature Communism, hence this lower phase is best dubbed Socialism and the term "Communism" reserved for the more advanced and higher phase into which Socialism will hopefully evolve. 

Marx, basing himself on materialist dialectics, sees Communism evolving out of capitalism via Socialism. The Socialist stage still has many capitalists "taints" associated with it and retains, in Marx's words, "the narrow horizon of bourgeois rights." Bourgeois rights still predominate in the creation and distribution of wealth-- goods and services are dished out, in the main, to each according to his/her work. 

There must still be a state apparatus to ensure that rights are preserved and recognized. In the beginning of the establishment of Socialism then the new state will be charged with defending bourgeois rights-- it will be, in fact, a bourgeois state administered by workers. Lenin puts it this way, "for a certain time not only bourgeois rights but even the bourgeois state remains under Communism [i.e., the first phase--tr], without the bourgeoisie!" Capitalism without the capitalists!-- or least without them in control. There are "socialist" countries today still evolving along these lines.   

Lenin says this view of a bourgeois state without the bourgeoisie may look like a paradox but Marx held that it was inevitable “in a society issuing from the womb of capitalism.” Nevertheless, democracy is absolutely necessary for the working class but it is only a stage along the road from feudalism to capitalism and on to Communism.

Democracy is seen by the workers as leading to equality and ''equality'' is “a useful slogan” as long as we remember that we mean by it “the abolition of classes.” But we get only formal not real equality under democracy. We get real equality only under Communism when distribution is ruled by needs not work. 

Lenin admits that“we do not and cannot know” how Socialism will transform itself into this future higher state but it will come after the workers have smashed to bits the current form of the bourgeois state and substituted a higher form of state (still a state) based on a people’s militia of “universal participation.”  [Bill of Rights Socialism based on the Second Amendment ?]

 At this stage quantitative changes will lead to qualitative changes. By this Lenin means that the vast numbers of the formerly oppressed are now directly involved in ruling and administering the economy and the state and this changes the way democracy functions— no longer a tool of the bourgeoisie to control the people but a tool used by the people to take charge of their own lives. The recent midterm elections in the United States, giving control of the Senate to the right wing reactionary Republican party, serves as a reminder of how democracy serves as a tool of the bourgeoisie (not that a Democractic victory would have changed this relationship but it would have appeared less sharply). 

All this depends on the advanced stage that capitalism has reached where universal literacy has been attained (“already realised in most of the advanced capitalist countries”) and the workers and been “trained” in how to operate the vast complexities of the capitalist industries and factories already “socialised” put presently still owned by the capitalist class. The specialized workers—i.e., trained economists, agronomists, scientists and engineers will, Lenin says, work “even better” for the workers than for the capitalists. 

 I am not so sure how the “specialists” would have reacted to getting “equal” pay with the workers under the new system as Lenin says everyone will be a state employee all of whom will “do their share of work” and “should receive equal pay.”  It is moot anyway as this program never got off the ground as it required revolutions in the advanced capitalist countries to succeed as well as what was going on in Russia. I don’t think Lenin, at this time, thought the Russian Revolution was going to be left high and dry on its own.

Nevertheless, it is interesting to see what he thought the first stage, the socialist stage, would be like after the revolution. The new socialist state would convert the capitalists into employees and the workers themselves would run all the economic institutions in the state— everyone would be a state employee. The result of this would be that: “The whole of society will have become one office and one factory, with equal work and equal pay.” If this is the practical realistic outlook for the lower stage, the socialist stage, of Communism it is just as well the founders did not engage in “Utopian speculations” concerning what the “higher stage” would be like.

Lenin says that this lower stage of “‘factory’ discipline” is not the ideal goal of the revolution but a necessary foothold to overcome “all the hideousness and foulness of capitalist exploitation in order to advance further.”  Once this first stage has been achieved and the human collective of the new order has learned to work and share without the selfishness, greed, and alienation from its humanity that capitalism fosters and practicing human decency has become a habit, then and only then will it be possible to begin to transition to the higher stage of Communism and the withering away of the state and our motto can truly be Novus ordo seclorum.

Coming up: the sixth and last chapter of State and Revolution—“Vulgarisation of Marx by the Opportunists” ( plus ça change, plus c’est la même chose.)

Niall Ferguson on Kissinger's "World Order" [Part Three]

Niall Ferguson on Kissinger's World Order  [Part Three]

Thomas Riggins

Ferguson points out a basic question that Kissinger asks regarding our ability to understand international order. “Is there a single concept and mechanism logically uniting all things, in a way that can be discovered and explicated … or is the world too complicated and humanity too diverse to approach these questions through logic alone, requiring a kind of intuition and an almost esoteric element of statecraft?”  

This is a meaningless jumble of words. Logic is a method for determining the validity and soundness of arguments not a method for discovering how the world works. Discovery is basically an empirical affair of data collection from which generalizations can be made based on the coherence and correspondence of the data to our experience and understanding of its significance.

Kissinger does not think that "logic" can do the trick of understanding the world order but his alternative is not likely to do the trick either. Ferguson says Kissinger opts for “intuition” (the Muslims are yearning for us to intervene in their part of the world—oops wrong intuition) and the almost “esoteric” or the secret mysterious  ways of seeking out the truth. If we follow these ideas, I don’t think we will be seeing an improvement in US foreign policy any time soon.

Ferguson gives an example of Kissinger’s intuition— it can’t be demonstrated, but here it is. The “players” in “the great game of foreign policy” make their moves based on their understanding of history made by a “deep study of the past.” Since the US has made so many foreign policy mistakes it must be due to a “shallow” study or no study of the past. But wait— it doesn’t seem to be the history of the world or other countries that is the issue, but rather “self-understanding “ of your own history.

The US only needs to know its own deep history not, for example, the history of the Middle East to play the game there. Kissinger says, “For nations, history plays the role that character confers on human beings.” So don’t trust those Germans, Adolf, you know who, is still there lurking about in their esoteric intuitional subconscious. This is bad intuition. We get nowhere with the equation Tsar = Stalin = Putin or Russian Empire = Soviet Union = Russian Federation. 

Nations are not people anymore than corporations are and the human character cannot be applied to them. It is not an esoteric element we need to master but concrete social forces that can be studied in a scientific way. Looking at class struggles and economic interests and who wants to exploit whom will better explain how the “great game” is played. 

At this point there follows a long section about earlier works by Kissinger and more indulgent fawning over his ideas. To show what a great thinker Kissinger is I will resume this review with Ferguson's discussion of his views on Islam. 

From it's very beginnings Islam was, Kissinger says, "a religion, a multiethnic superstate, and a new world order."  In dealing with the Islamic Middle East today Ferguson says he has never seen Kissinger so critical of Bush and Obama as well as of Saudi Arabia. Here is his critique of the Saudis. The Saudi's have a very reactionary fundamentalist form of Islam as their state creed (Kissenger calls it "austere") and they have been supporting jihadists and fundamentalists around the world (some of whom are enemies of the US).

Kissinger says they have been making a great "error" in thinking they could support reactionary Islamist groups abroad and not have these groups also turn against them. The US, by the way, had this experience: it supported the most horrible Islamist terrorist groups you could imagine against the Soviets in Afghanistan only to have them turn against it after the Soviets were gone. 9/11 was an act of the US's Frankenstein's monster. The Saudi's can expect the same.

What isn't mentioned in this review is that Saudi Arabia is a medieval despotism that denies even basic democratic rights to its citizens. But the US is an ally of the Saudi state and thus itself a big supporter, de facto, of medieval despotism. Kissinger's criticism of the Saudis applies as well as to his and his successors attitudes toward that barbaric kingdom. It is love of oil, however, that is the true religion motivating US policy not engaging with  Islam.

Ferguson says Kissinger thinks the greatest problem for world order today is the sinking of the Middle East into sectarian strife. He doesn't mention that US policy is one of the major causes and supports of this strife which it promotes to justify its continued political (and military) interference. War and war profiteering is big business domestically. 

Instead, Ferguson says, regarding Kissinger's views,  "Even as the Sunni monarchies struggle to defend themselves against a rapidly metastasizing jihadist 'cancer'  that is in a large measure their own creation, Shia Iran edges steadily closer to being a nuclear-armed power."  What does one have to do with the other?

The main struggle of the Sunni monarchies is, however, against their own people who want democratic rights--- a struggle the US does not support as the case of Bahrain shows. The  "jihadi" threat is a cover for the repression of democracy. All talk about Iran's drive for nuclear weapons is meaningless blather as long as Israel is allowed to have nuclear weapons with no protest from the West.  

We will continue this review in part four.

Piketty for Progressives -- Part 6

Piketty for Progressives (Part Six  suite et fin)

Thomas Riggins

14. The Theoretical and Conceptual Framework of Piketty’s Book

In this next to last section of his Introduction Piketty presents some autobiographical information that he thinks will be helpful in seeing how his views developed. This information is about his subjective emotional experiences  and not at all on scientifically based views nevertheless,  the information is interesting and helps to explain many of his attitudes. It is a section more about what he calls his “intellectual itinerary” than about theory, as we shall see.

He tells us he turned 18 in 1989 when the Berlin Wall fell and was part of that generation who listened to the news of the fall of the Communist dictatorships and who had no affection or nostalgia for any of them including the Soviet Union.

An older generation who remembered it was the Communists who ran the underground against the Nazi occupation of his country and the Soviet Union which basically single handedly defeated Hitler’s Germany and liberated most of Europe from Nazi control might have had a different reaction. But it is a characteristic of callow youth to have no historical memory. He was, at 18, he says, “vaccinated for life against the conventional but lazy rhetoric of anticapitalism….” The disease infecting young minds in Paris at the time, however, was anticommunism not anticapitalism and it appears the young Piketty got the wrong inoculation.

Piketty is a firm believer in bourgeois democracy and supports a social order based on democratic debate which will provide equal justice to all under the rule of law. He appears innocent of the struggle based on class conflict aimed at ending the exploitation of working people resulting from the expropriation of their surplus labor power by a class of social parasites which has control over the means of production and distribution. This accounts for the popularity of his book.

At the age of 22 he had a decisive experience. Having just been awarded his PhD he got a job at MIT and, as he puts it ,“I experienced the American dream.” This was extremely fortunate for him because as an economist he must be aware  that the majority of Americans never get to experience the ‘’American dream’’ (except as a dream).

The dream, however, wore off and by age 25 he knew he wanted to go back to France. One of the reasons he left was he was not convinced by the work of US economists and he realized, despite his early successes that he “knew nothing at all about the world’s economic problems.” Economists didn’t seem to have much interest in history and turned out theories without realizing what facts had to be explained. 

Piketty thought that the field was still addicted to a childish fascination with mathematical models which created the illusion of science without its substance due to the lack of proper historical research and contextualization of factual material. Piketty decided he wanted to do research and discover the data that was necessary in order to do mature scientific work in economics.

It seems that American economists and French economists share a tendency to think they are being scientists while in fact “they know almost nothing about anything.” This doesn’t seem to bother American economists but it does the French and as a result they have made great efforts to communicate  and collaborate with other disciplines— sociology, anthropology, history, political science, perhaps even (shudder) philosophy.

The fact is that Piketty thinks economics “should never have sought to divorce itself from the other social sciences and can advance only in conjunction with them.” His book is an attempt to advance this cause and he considers it just as much a history book as one on economics. He tells us that anyone, with a little effort, will be able to understand his book (there is minimal jargon) and come away with a clear understanding of the historical developments that form the background to his theories on the growth of income and inequality in the modern world.

The last section of the Introduction deals with the 

Outline of the Book

Piketty’s book is organized as follows:

Introduction [covered by this series of articles]

Part One— two chapters  to go over basic ideas to be used later in the book.

Part Two— four  chapters  on the future of the capital/income ratio and the division between nations of the future income between labor and capital.

Part Three— six chapters on the structures of inequality both within and between nations and the future possibilities of wealth distribution internationally over the next few decades.

Part Four— four chapters on conclusions and policy suggestions on how to handle the problems of income inequality.

Piketty admits, and shows, that all the subjects that he is writing about are basically  "deeply unpredictable.”  Not a good inducement to spend a lot of time going over these four parts. He also tells us that “ history always invents its own pathways” and that the “usefulness” of the lessons he has drawn from his research  “remains to be seen.”

Finally there is a conclusion in which Piketty sums up his position, decides that Marxism is old hat, and advocates for a more robust democracy  “if we are ever to regain control over capitalism.”   

There is no doubt that inequality and exploitation is increasing. There is an historically, I believe, tried and true explanation of these phenomena and a solution to the the human misery they cause. It is be found in the works of Karl Marx and his followers who have studied the capitalism of the past and present and have demonstrated that the system cannot reform itself sufficiently to ward off existential disaster and must be replaced by a socialist order. 

Piketty, as well as other establishment economists who think capitalism can solve its own problems within the system, will continue to put forth alternative explanations opposed to those of the Marxist economists. Whether these alternatives are mere fads of the moment or useful counter-theories, indeed, remains to be seen.

Piketty for Progressives -- Part 5

Thomas Riggins

This posting will cover sections 11 and 12 in Piketty's introduction to Capital in the 21st Century.

11. The Fundamental Force for Divergence: r > g

This formula, r is greater than g, where r is the  average annual rate of return on capital and g is the rate of annual economic growth “sums up the over all logic” of Piketty’s arguments regarding growing inequality under capitalism.

Piketty thinks the outlook for the 21st century is that r will be much greater than g and this means that inherited wealth will be greater than output or income. Under the rule of r > g it follows that people with wealth need save only a small fraction of their income and it will accumulate faster than the economy does thus increasing inequality. A real possibility exists that the increase in inequality will undermine the principles upon which bourgeois democracy is based. Billionaires, for example, could be able to sink so much money into elections and lobbying that they will basically control the electoral process and the government and people’s democratic rights will honored in name only if at all.

Piketty thinks that this scenario is a real possibility but it is not inevitable. Besides this powerful D-force there are also C-forces at work that could delay or even completely counteract it. He thinks, however, that the decrease of g in the coming decades is very likely.

His view is, he says, less “apocalyptic” than Marx’s view. But I think he mischaracterizes Marx’s outlook. He says Marx has a principle of “infinite accumulation and perpetual divergence” because he thinks g will be 0  due to 0 growth in productivity. Because of this there will be a revolution to overthrow capitalism (the Apocalypse). But this isn’t Marx’s view at all. His view, somewhat simplified, is that  capitalism will eventually run out of markets due to a crisis of over production and will breakdown because it won’t have the profits needed to sustain itself.

Piketty says his theory of r > g has nothing to do with any “Imperfections” in the market. It is not inevitable but is a likely occurrence and we should be aware of it. He stresses that the “more perfect” the capital market the more likely is r > g. Does this imply that the “better” the capitalist system is the more inequality it will create? This would make it incompatible with any kind of democracy and logically implies that some sort of fascist anti-democratic state is its natural outcome.

Piketty thinks the capitalist state will have to intervene and manipulate the outcome of the “more perfect” capitalist market to counteract the negative effects of r > g. He suggests “a progressive global tax on capital.” He doesn’t think this will be a real world solution to the problem and whatever the different nation states end up doing will be “less effective.” Does this mean that, after all, in the real world r > g is actually unstoppable? Is the Apocalypse destined to be our fate?

12. The Geographical and Historical Boundaries of Piketty’s Study

The upshot of this section is, that while Piketty will use information from many areas of the world to bolster and develop his views, he will rely “primarily on the historical experience of the leading historical countries: the United States, Japan, Germany, France, and Great Britain.”

He thinks the UK and France are particularly  important because they have the best economic records kept from the 19th century and they were the leading countries of the “first globalization” (1870-1914) of international trade and finance. This, by the way was the period analyzed by Lenin in his Imperialism: The Highest Stage of Capitalism. This first globalization was, Piketty says, “prodigiously inegalitarian.”

Piketty notes that the “first globalization,”  is “in many ways similar” to the second one which has been going on “since the 1970s.”  It is so similar that Lenin’s book on Imperialism is still largely relevant for understanding it. One of the weaknesses of Piketty’s book is that neither “Lenin” nor “Imperialism” appear in its index — a strange omission in a work trying to explain the origins of, and remedies for, inequality.

One of the similarities Piketty notes is the fact it was not until beginning of the 21st century that the leading imperialist countries attained the level of stock market capitalization  vis a vis GDP as the UK and France had at the beginning of the 20th century.

He next explains why he spends so much time on France. The first reason is that it has records going all the way back to the late 1700’s. The second reason is he thinks France is more typical than the US and its future will more likely be what most states will experience rather than that of the US. This is because the US population went from 3 million in 1776 to 300 million today. That quantitative leap has had its qualitative accompaniment  and the US “is no longer the same country it was.” France meanwhile has only doubled its population from 30 to 60 million over two hundred years not increased it a hundred fold. It is still basically the same country. Piketty doesn’t see the world population increasing 100 fold in the next two hundred years so French development is more likely representative to the future.

He means the trends in inequality seen in French history are more useful to predict future developments than are those seen in US history. This is another example of “American Exceptionalism" as the US experience “is in some sense not generalizable” and social class and inequality in the US are “so peculiar” when contrasted with other countries.

The third reason is that France is “interesting” because its revolution was more “bourgeois” than the English (1688) or the American (1776). The English kept their nobility and the Americans their slaves while the French actually established “ the ideal of legal equality [of men]  in relation to the market.”  This has important implications in discussing the growth and future development of inequality. Piketty also says that the concentration of wealth was  the same in Britain as in France so even though the French had legal equality for all and the British did not this was not enough to “ensure equality of rights tout court.”

We will finish the introduction to Piketty's book in the next posting.

Niall Ferguson on Kissinger''s new book "World Order" [Part Two]

Thomas Riggins

‘Vice is a monster of so frightful mien,

 As, to be hated, needs but to be seen;

 Yet, seen too oft, familiar with her face,

 We first endure, then pity, then embrace.’

(Pope, Essay on Man)

Ferguson tells us that Kissinger (whose ideas he seems to embrace) does not  pay much attention to Obama’s “strategic incoherence” in his book. Ferguson, however, can read between the lines and detects that Kissinger was inspired by his “dismay” over “the amateurism of the past six years” of Obama foreign policy. Here is a quote from the great man himself: Kissinger asks: ”Where, in a world of ubiquitous social networks, does the individual find the space to develop the fortitude to make decisions that, by definition, cannot be based on a consensus.” Maybe it is foolishness, not fortitude, to try and make decisions based simply on what the “individual” thinks or feels. What decisions, other than what  you personally want to eat for dinner, want to do in you spare time, or what movie you want to watch, and the like are “by definition” impossible to decide by consensus?

Kissinger goes on to say that candidates running for office may be forced to spend more time  raising money then dealing with the big issues. Does a candidate try to explain his ideas to the people or does he tailor what he thinks to please the  voters. Ferguson implies that is what Obama types do because Kissinger's concerns would not have been aroused by the campaigns of such stalwart individuals as John McCain or Mitt Romney who took “scant regards” to focus groups in coming up with their absurd “foreign policy positions.”  

Perhaps if they had  they would have found out what people were really concerned about and would have abandoned some of their more looney ideas and made a better showings at the polls. Would anyone respect the foreign policy ideas of someone who picked a nut job for his running mate?

Ferguson reveals his own ineptitude when he says Obama made fun of Romney in a debate on foreign policy by saying “The 1980s are now calling to ask for their foreign policy back”  and thinks that those policies would offer better ways “of dealing with Vladimir Putin.” Well, Putin is no Gorbachev and if Ferguson thinks using thirty year old cold war techniques with Russia in the 21st Century is the way to go then he, not Obama, is the one who is “no master strategist.”

The “starting point” of Kissinger’s book, Fergunson writes, is that we are at the end of an "American world order” that was at its high point in the 1980s. The real title, then, of Kissinger’s book should have been, I think, The Loss of American World Domination.  Here is how Kissinger himself describes this 1980s word order: it was a time of “an inexorably expanding cooperative order of states observing common rules and norms, embracing liberal economic systems, forswearing territorial conquest, respecting national sovereignty, and adopting participatory and democratic systems of governance.”

 A quite imaginary fantasy on Kissinger’s part. Where was the respect for the sovereignty of Nicaragua, of Cuba, of Iran, of Grenada, of Cambodia, of the DPKR, of Vietnam, of Libya. What democratic systems were supported in Central America where the US supported genocide (Guatamala) and fascist regimes in other countries, not to mention in Indonesia and Chile.  The “cooperative order” only included states kowtowing to US interests. Kissinger himself helped, in 1970s, overthrow the democratically elected government in Chile and helped institute a fascist regime.

It seems that the American people no longer believe in this “definition” of world order. What Kissinger and Fergunson should have pointed out is that educated American people don’t believe that this fantastic description ever applied to “an American world order.”

 We are told there are now three other contending kinds of “world order” on the agenda. They are: 1) A “post-Westphalian European order” [i.e., post the 1648 Peace of Westphalia ending the Thirty Years War and other hostilities], one in Kissinger’s words  which is “a system of independent states refraining from interference in each other’s domestic affairs [the US will never stop doing this] and checking each other’s ambitions through a general equilibrium of power.” But the US is a super power, how could such an equilibrium be imposed? 

 2) An “Islamic world order” based on the ideas of Sultan Mehmed II (who conquered Constantinople in 1453 thus ending the (Eastern) Roman Empire) and who proclaimed “one empire, one faith, and one sovereignty in the world” and

 3) a “Chinese order” based on the imperial (actually Confucian) idea of “harmony under heaven” (tian-xia, maybe not such a bad idea, nothing wrong with harmony).

Let’s look more closely at these four kinds of “ideal” world order— American, European, Islamic, and Chinese.  We will look at them through the (jaundiced) eyes of Kissinger as reported by Ferguson. Let us dismiss the “American” order as we have already pointed out that it was a Kissinger fantasy. It boiled down to the attempted implementation of a US diktat in international affairs dressed up in democratic phraseology by Kissinger and his likes. It is still the US’s favorite modus operandi but as American power weakens it is becoming harder and harder to enforce.

The other three systems are also flawed. Kissinger thinks the “European” system is departing from its “Westphalian” ideals by trying to form the EU which combines “pooled sovereignty” with attempts to “limit the element of power” in the new institutions it is creating. The problem is that none of the countries in the EU want to end up bossed around by Germany which is where “pooled sovereignty” is taking them. 

The problem of the “Islamist world order” [other than the fact that it doesn’t exist] is, according to Kissinger, that it is “based on the fundamentalist version of their religion” and quests for “a global revolution.” This is to take the Islamic State, ISIS, ISIL or whatever you want to call it and the jihadists as far more historically significant than they are. 

They are local disturbances, generated in reaction to the failures of the American diktat in their part of the world, and will vanish as soon as  the Americans realize it is their own policies, based on ignorance of the culture, religion, and history of the area and motivated more by economic motives than anything else, which cause these groups to form and they then take steps to really disengage from meddling in the area. The UN will have to help the US get out gracefully as the US has shown it is incapable of conducting itself rationally when it comes to dealing with the people in this part of the world.

As for the “Chinese order” (another culture area of which Americans seem ignorant), Kissinger says earlier ideas about the “Middle Kingdom and its tributaries” have been “jettisoned.” It seems the Chinese (and others) are acting as “hyper-Westphalians” and see the area in terms “of aggressively competing nation states.” Kissinger finds this (his own imaginary construct) as “inapplicable” for this region.

There is a slight interruption in Fergunson’s review at this point so that he  can fawn all over Kissinger the statesman, the academic, the historical thinker ( he leaves out the war criminal, the supporter of fascists, the accomplice in murder, torture and genocide ). We will return to Ferguson’s analysis in our next installment (part 3 of the review of World Order.)