In My View

Too big to sink

The US cannot be allowed to sink, much in the same way the US central bank, Federal Reserve judged that the insurance giant American International Group (AIG) could not be allowed to sink; thus needs to be nationalised, so to speak. The logic for the latter action by the US Fed was that AIG was too big to be allowed to go bust. For the same reason, the US also is too big to be allowed to go down the tube and become a relic of history, that one of its prized sons had declared having ‘ended.’

One recalls that in the early 1980s, when India hosted one of the Non Aligned Movement (NAM) summits in New Delhi, Forbes Burnham, then president of Guyana and a Marxist, had declared, “When you owe a million dollars you are a creditor; when you owe a billion dollars, you are a partner.” The US owes the world trillions of dollars and other immeasurable debts, for which it needs to be held accountable.

So, even though it cannot be allowed to go into oblivion much in the same way the Soviet Union did, but it has to be made to change its past ways. There are many dimensions to this objective: economic, political and strategic. Each needs to be examined at least briefly here.

First, economic. The flurry of nationalisations in the American financial sector underlines the fact that laissez faire capitalism – the form of social organizing principle – which the USA espoused, is in its death throes. One does not need to run to a Paul Kennedy or to a Giovanni Arrighi to know that this cycle of accumulation of the long duration (longue duree) is closest to an end.

Now, one way the world could continue to prop up this US phase was if countries like China continue to shore their huge surpluses in US government papers, supposedly in the logic that the US government was still solvent. This action of theirs would indeed be a travesty of the progression of history because it would, in effect, support the oppressive ways of the US elite and their exploitation of the world’s poor.

In fact, considering that China has developed a major presence in the African continent it should take steps to immediately put a stop to the net outflow of resources in name of aid economics, from that impoverished continent. Already the world’s exporters have come to realise that they could trade in a volatile dollar only to their own peril. They are in search of a global currency; for the time being many of them are insisting on Euros, at least from the European continent.

If one pursues that logic a little further, one would come to the conclusion that unlike the Great Depression of 1929, this current crisis of the US form of capitalism does not have a world war or post-war European reconstruction as a saviour on the horizon. The only manufacturing worth the name remaining in the USA is the armaments sector. So in the near term, the US elite would be bent on starting a major war or wars, be it with Iran or in South America.

This calls for an immediate demand by the countries – those who can think out of their skin – for deep reforms of the institutions born out of Yalta, Potsdam and Bretton Woods agreements. No longer can the United Nations Security Council rubber stamp what is decided at the Foggy Bottom headquarters of the US State department and impose it on nations of the world in name of a sham consensus.

Plus, if the US economy is to be bailed out by investing nations, it should be made to reduce its current military expenditure of almost 50 per cent of the world total by half by the next decade, leading to a sharper cut in the next decade. Washington should be desisted from sending single-handedly, expeditionary forces all across the globe as it does now in the name of peace-keeping or nation-building.

At the strategic level, this replacement of the USA as the globe’s ‘final arbiter’ cannot be complete without an attempt to rein in its nuclear weapons inventory. It should be the goal of the major powers of the world that there would be more fund infusions into the US economy, both in terms of cash and commodities only if Washington decides publicly to implement Art IV of the Treaty on the Non Proliferation of Nuclear Weapons. The article states, “Each of the Parties to the Treaty undertakes to pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control.”

At the end, it needs to be said that this is a leadership moment for countries like China that have the muscle both in terms of material wealth, human resources and political capital. They would need to step up to the plate and be counted to make this American crisis into a global opportunity and create an equitable world.

Pinaki Bhattacharya, currently located in Kolkata, is a Special Correspondent with the Mathrubhumi, Kerala. He writes on Strategic Security issues. He can be contacted at pinaki63@dataone.in