Trade legerdemain on both sides of the Atlantic

The Democratic Party has responded to the resistance against ramming through new trade agreements by giving the process a new name. “Fast-track” has been rebranded as “smart-track” and, voilà, new packaging is supposed to make us forget the rotten hulk underneath the thin veneer.

Don’t be fooled. The Obama administration and its Senate enablers are nowhere near giving up on its two gigantic trade deals, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Because the stealthy “fast track” route — special rules speeding trade legislation through Congress with little opportunity for debate and no possibility of amendments — is the only way these corporate wish lists can be enacted, a “rebranding” is in order.

The new chair of the U.S. Senate’s Finance Committee, Oregon Democrat Ron Wyden, earlier this month, in a speech given to apparel-industry corporate executives, announced his intention to replace the “fast track” process with a “smart track” process. That is noteworthy because the Finance Committee has responsibility in the Senate for trade legislation. It also noteworthy because Senator Wyden has voted to approve the last five U.S. “free trade” agreements, going back to 2005.

Grand Place, Brussels (photo by Wouter Hagens)

Grand Place, Brussels (photo by Wouter Hagens)

Although the Transatlantic Partnership being negotiated between the United States and the European Union receives less attention than the 12-nation Trans-Pacific Partnership, neither has much chance of passing without special fast-track authority. Should Congress agree to grant the White House fast-track authority, the Obama administration would negotiate a deal and submit the text for approval to Congress under rules that would prohibit any amendments or changes, allow only a limited time for debate, and require a straight yes or no vote.

None other than the previous U.S. trade representative, Ron Kirk, said the Trans-Pacific Partnership has to be secret because if people knew what was in it, it would never pass. We should take him at his word.

Tell the people what they want to hear

On the surface, Senator Wyden’s speech to the American Apparel & Footwear Association Conference on April 10 sounds conciliatory. He made the standard ritual references, calling for trade agreements that create jobs and “expand … the winners’ circle.” The senator proclaimed:

“I want to be very clear: only trade agreements that include several ironclad protections based on today’s great challenges can pass through Congress. I am not going to accept or advance anything less.”

He did not fail to declare that “strong standards and enforcement” on labor and environmental standards “is an imperative.” But we can be forgiven skepticism here because Senator Wyden had this to say on existing labor and environmental standards:

“People on all sides of the trade debate should more openly acknowledge the progress in these areas and the hard work that went into getting those reforms.”

Progress? There are no enforceable rules concerning these areas in existing trade agreements such as the North American Free Trade Agreement. Lost jobs, reduced wages, more unemployment, higher food prices and reversals of environmental laws have invariably been the results. Unaccountable, secret tribunals staffed by corporate lawyers have enabled corporations to overturn regulations in all three NAFTA countries — and the U.S. government, in its current trade negotiations, wants rules even more weighted in favor of multi-national corporations than exists in NAFTA.

If this is what Senator Wyden considers to be “progress,” what possible basis could there be for believing the Trans-Pacific and Transatlantic partnerships will deliver anything other than more corporate-dictated austerity?

The existing version of fast-track legislation — the Bipartisan Congressional Trade Priorities Act of 2014, better known as the Camp-Baucus bill — was effectively dead not long after its January release. It was expected that a new version of fast-track, with a couple of small, cosmetic changes and a cover story that opponents had been heard, would come. Senator Wyden has not disappointed, and it’s coming perhaps quicker than activists expected. This will become a hot potato as the November mid-term elections approach, so the senator was careful in his speech to not provide a timetable:

“I am going to work with my colleagues and stakeholders on a proposal that accomplishes these goals [of more transparency] and attracts more bipartisan support. As far as I’m concerned, substance is going to drive the timeline.”

‘Consultation’ only to let people vent

The perception of more transparency and public participation is all that we are likely to see, perhaps on the model of the European Union’s new public-consultation process. The process centers on a web site that E.U. citizens can use to fill out a questionnaire. The page is complicated to use, and has a 90-minute time limit, after which any imputed data is wiped out. Write fast! And for good measure, the E.U. trade commissioner, Karel De Gucht, once again declared, in his last visit to Washington:

“[W]e are happy to be scrutinized on this: no standard in Europe will be lowered because of this trade deal; not on food, not on the environment, not on social protection, not on data protection. I will make sure that [the Transatlantic Trade and Investment Partnership] does not become a ‘dumping’ agreement.”

Neither his office, nor that of the U.S. trade representative, Michael Froman, have been kind enough to share with the public when the next Transatlantic negotiating session will be held. There has been no lack of communication with corporate lobbyists, however. A European public-interest group, Corporate Europe Observatory, requested documents from the European Commission (the bureaucratic arm of the E.U.) to discover with whom E.U. negotiators are consulting.

It was revealed that of 127 closed meetings concerning the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists. The Observatory reports:

“The list of meetings reveals that … there is a parallel world of a very large number of intimate meetings with big business lobbyists behind closed doors — and these are not disclosed online. These meetings, moreover, were about the EU’s preparations of the trade talks, whereas the official civil society consultation was merely an information session after the talks were launched. The Commission’s rhetoric about transparency and about consulting industry and NGOs on an equal basis is misleading and gives entirely the wrong impression of [the European Commission’s] relations with stakeholders.”

Three German Green Party members of the European Parliament (Ska Kellar, Rebecca Harms and Sven Giegold) have leaked the E.U.’s position paper on the Transatlantic Partnership negotiations (Members of the European Parliament are shut out of the negotiations.) Although this leak offers only a glimpse at E.U. negotiating positions, Europeans have a basis for concern. A rough English translation of the leaked document (available only in German) states:

“The agreement will provide for the reciprocal liberalization of trade in goods and services and rules on trade-related issues, which it pursues through ambitious goals that go beyond what is available via the existing WTO commitments.”

Although it also says the agreement will include a “general exception clause” on the basis of articles XX and XXI of the General Agreement on Tariffs and Trade (GATT), which purport to allow exceptions to trade agreements when necessary to safeguard human, animal or plant life or health, such clauses are meaningless. Other agreements have similar clauses, but are consistently superseded by rules such as Article 12.6 of the Trans-Pacific Partnership text that “Each Party shall accord to covered investments treatment in accordance with customary international law.”

‘Customary law’ is what a secret tribunal says it is

Precedents handed down in secret tribunals are what constitute “customary international law.” That the E.U. negotiators intend to “go beyond” the rules of the World Trade Organization should leave no doubt that “law” as desired by multi-national corporations is what is contemplated. Indeed, the leaked E.U. text states an intention to:

“Provide a level playing field for investors in the U.S. and in the EU. … The agreement should provide an effective mechanism for the settlement of disputes between investors and the state.”

That goal should be borne in mind when evaluating the E.U.’s April 10 announcement that it has refused to include the standard “investor-state dispute mechanism” in its proposed trade agreement with Canada, despite Canada’s now dropped insistence that it be included. Inside U.S. Trade reports that:

“Canada and the EU have agreed to a ‘closed list’ approach toward defining what constitutes a breach of fair and equitable treatment that was proposed by the EU. … The closed list that the two parties agreed upon is comprised of: denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds; and abusive treatment of investors.”

On the surface, the “closed list” approach to the bases over which a corporation can sue a government appears to have narrowed from the more common approach that places no limits on corporate suits. But, critics say, the list of arbitrable issues remains open-ended and open to corporate abuse. The Canadian public interest group International Institute for Sustainable Development, in a recently updated paper, warns:

“The definition of investment is defined too broadly, covering any kind of asset, independent of whether or not investments are associated with an existing enterprise in the host state. … [The E.U. proposal would] make the concept of fair and equitable treatment very open-ended and, as a consequence, highly problematic.”

The agreed-upon language, by not defining what constitutes an “asset,” would enable corporations unlimited opportunities to sue governments. Any rule or regulation that a corporation says will reduce its profits remains eligible to be overturned under the precedents of “customary international law.” The text of the agreements — and how they are likely to be interpreted — count for vastly more than the happy talk of trade negotiators, whichever side of the Atlantic or Pacific oceans.

European countries with strong regulations on the environment or food safety are at grave risk from the U.S., and environmental laws everywhere are prime targets. Activist work against these multi-national trade agreements has gained momentum in the past year, but there is much work to be done to stop what constitutes the most destructive corporate power grabs yet. Popular pressure is the only means to stop the Trans-Pacific, Transatlantic and Canada-E.U. trade deals. The next task will be to reverse existing trade deals that have done so much damage.

Corporate power grab of Trans-Pacific Partnership clearer, but opposition building

The usual boilerplate announcements that “significant progress” was achieved in the just concluded round of Trans-Pacific Partnership negotiations can’t mask that public opposition is growing and that the United States seems to be having difficulty bullying its negotiating partners.

That does not mean that the TPP is dead — far from it — but the continued insistence of the Obama administration that the text will be complete by the end of 2013 is no more than wishful thinking. That Congress might not play its assigned role of rubber-stamping was strongly signaled last week when 151 Democratic Party members of the House of Representatives and more than two dozen Republicans signed various letters opposing “fast-track” trade authority. Many did so due to sustained grassroots activism.

“Fast-track” is a mechanism whereby Congress waives its right to debate and amend, instead binding itself to a straight up-or-down yes or no vote in a limited time frame. The worst trade deals, such as the North American Free Trade Agreement, have become U.S. law through this mechanism. The Obama administration is widely expected to introduce such a bill, passage of which would greatly increase the chances of the Trans-Pacific Partnership getting approved by Congress.

Activists have anticipated since early October that a bill for fast-track authority — formally known as trade promotion authority — might be introduced at any moment. That such a bill has been delayed is a sign that mounting opposition to the TPP within the U.S. has introduced an element of caution into the Obama administration’s thinking.

Demonstration against TPP in Salt Lake City (Photo courtesy of Citizens Trade Campaign)

Demonstration against TPP in Salt Lake City (Photo courtesy of Citizens Trade Campaign)

Strong opposition to draconian U.S. proposals by several of the 11 other Pacific Rim countries negotiating the text of the TPP has certainly played a role in slowing down the negotiations. The divergence of the negotiating positions became clear earlier this month when WikiLeaks published the full text of the TPP chapter on intellectual property. Despite being billed as a “free trade” agreement, this chapter, like most of the TPP, has nothing to do with trade. Rather, it — and, in particular, the U.S. negotiating positions — are the dreams of the most powerful multi-national corporations.

The same is true for the Transatlantic Trade and Investment Partnership, another “free trade” agreement simultaneously being negotiated between the United States and the European Union. The TTIP also just concluded a negotiating round, with similar opaqueness. What the U.S. is attempting to impose on Canada, Mexico, Australia, New Zealand, Chile and the other TPP countries on behalf of its multi-national corporations is undoubtedly the basis for what it seeks to impose on Europe. Corporate lobbyists have access to the text, but legislators and parliamentarians do not.

Sustained and organized mass opposition is the only thing that will stop these two extraordinary power grabs that will fatally undermine any semblance of democracy. If the TPP were to be implemented, labor safeguards, safety rules, environmental regulations and measures to rein in financial speculation would be struck down because a multi-national corporation’s profits might be affected — corporations would be able to bypass national laws and courts when they are in a dispute with a government, and instead can have their dispute adjudicated by a closed tribunal controlled by their lawyers.

Huge giveaways to pharmaceutical industry

The TPP intellectual property chapter, published by WikiLeaks, is crammed with corporate giveaways in its 96 pages. (This is only one of about two dozen chapters.) Japan is the country, at least in this chapter, most often in alignment with U.S. negotiating position, although frequently the U.S. is opposed by all other countries.

There are several sections that broaden what is patentable subject matter — if implemented, the TPP would make patents:

  • “Available for any new uses or methods of using a known product.”
  • Require patents to be granted if the patent “involves an inventive step,” even if there is no new use for it.
  • Allowable for living organisms, including plants and animals.

What these proposals would mean, if implemented, is that a name-brand pharmaceutical company, for example, would be able to claim a new use for high-priced medicines just before the patent was due to expire, thereby extending the patent and blocking a far less expensive generic equivalent from becoming available.

Under the North American Free Trade Agreement, the U.S. pharmaceutical company Eli Lilly sued Canada for $500 million because the Supreme Court of Canada upheld the invalidation of an Eli Lilly patent. Canada’s ability to enforce its own laws would be undermined by the TPP, according to a Public Citizen analysis:

“Canada’s decisions are based in its ‘promise doctrine,’ a patent rule which requires patents claiming a future usefulness to demonstrate or soundly predict that usefulness at the time of filing. The United States has proposed a rule for the Trans-Pacific Partnership negotiations that could undermine Canada’s promise doctrine. Whether purposeful or not, this would support Big Pharma’s plans to transform Canadian practice and even, seemingly, some of the goals of Lilly’s outrageous suit.”

Stop TPPCompanies like Eli Lilly would be in a stronger position to overturn any law they don’t like. The TPP’s intellectual property chapter would also attack rules such as the Indian Patent Act that protect access to affordable medicines worldwide, and would require extensions of patents on the demand of a corporation if it deems the period of time required to approve its patent “unreasonable.” Doctors Without Borders/Médecins Sans Frontières reports:

“The leak confirms our worst fears—the US is continuing its attempts to impose an unprecedented package of new trade rules that would keep affordable generic medicines out of the hands of millions of people.”

The return of SOPA

The defeat of the Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA) — thinly veiled attempts at Internet censorship stopped by popular pressure — would be reversed under the TPP. A proposal by the U.S. and Australia would require Internet service providers to police their users, with ISPs required to cut off Internet access, block content and actively monitor usage to avoid liability if a copyright holder claims one of its copyrights is being infringed.

Monica Horten, a visiting Fellow at the London School of Economics writing on her Iptegrity.com web site, summarizes the TPP’s dangers to the free flow of information:

“[T]t is a toxic potion that would force the Internet Service Providers (ISPs) to police their networks, and turns current law on its head. … Where it concerns the Internet and digital content, much of the TPP intellectual property chapter looks like a cut-and-paste from ACTA. Certainly, it brings in similar secondary liability and criminal measures that were in ACTA. However, there are specific new proposals that give more reasons for concern. … Within the Internet section, is a  USA/Australian proposal that contains the core desires of Hollywood and the Motion Picture Association.”

Canada, back by several countries, is seeking less onerous restrictions, University of Ottawa law professor Michael Geist writes:

“From a Canadian perspective, the U.S. demands would require an overhaul of Canadian copyright law and potential changes to privacy law. For many other TPP countries, the issue is creating a clear divide, with the U.S. conditioning ISP safe harbours on subscriber termination and content blocking, while the Canadian model favours greater flexibility in establishing systems that create incentives to address alleged infringements online.”

Will Canadian negotiators hold firm or capitulate? Given the harsh policies of Prime Minister Stephen Harper — the George W. Bush of the North — much activism will be required to avoid SOPA getting in through the back door.

You won’t be able to know what is in your food

At the behest of corporations like Monsanto, which seeks to control the world’s food supply, labeling of genetically modified organisms would be illegal. Specific Trans-Pacific Partnership language on GMOs and GMO labeling has not yet surfaced, but because the goal of Monsanto and other U.S. manufacturers of GMO foods is to remove European restrictions against GMOs, this is likely to be an area where U.S. negotiators are pushing hard.

The European Union’s chief trade negotiator Ignacio Garcia Bercero, said “We are not in the business of lowering standards” in response to concerns that food safety rules will be lowered if the Transatlantic Trade and Investment Partnership comes to fruition, and European Union justice and rights commissioner Viviane Reding threatened this week that the E.U. would “freeze crucial data-sharing arrangements with the U.S.” if the U.S. refuses to acquiesce to European privacy standards.

But despite huffing and puffing from various European leaders, the latest round of TTIP talks proceeded smoothly. A European Commission press release happily declared, “A good atmosphere and the active involvement of regulators from both sides meant significant progress was made.” But, as usual, no details were forthcoming. The Office of the U.S. Trade Representative similarly reported “a very successful and productive set of meetings” about the TTIP and “significant progress” in the just concluded Salt Lake City round of TPP negotiations.

This latest round of TPP talks was even more secret than usual, with negotiators not bothering this time with the pretense of meeting with civil-society groups; thus much caution is advised. A potential turn for the worse is possible with the recent election of the right-wing Tony Abbott government in Australia, which may reverse some of the previous positions Canberra had taken against certain U.S. proposals. For example, previous Australian governments opposed investor-state disputes being adjudicated by secret tribunals controlled by corporate lawyers. It is unknown if the Abbott government will reverse that position.

The Australian television program Lateline reports that Prime Minister Abbott is in favor of “fast-tracking” the TPP and other trade agreements. A worrisome sign, as the U.S. is pushing hard for anti-democratic provisions such as investor-state disputes to be adjudicated in the secret tribunals. These mechanisms are in force in the North America Free Trade Agreement and many bi-lateral trade agreements. NAFTA, for example, uses a tribunal that is an arm of the World Bank in which only two of the more than 200 cases it has heard have been open to the public.

Agreements like TPP and TTIP have little to do with trade and much to do with imposing a corporate dictatorship. There is no time to waste.

When you are on top, ‘might makes right’ is ‘rule of law’

The Obama administration’s moralistic paeans to the “rule of law” concerning whistleblower Edward Snowden would carry considerably more weight if the United States weren’t continuing to harbor an assortment of ex-dictators and a terrorist who killed dozens in an airplane bombing. As soon as we look under the hood, we see “might makes right” at work, not “rule of law.”

If the U.S. government actually cares about the sanctity of international law, it could start by handing over Luis Posada Carriles, convicted of blowing up a Cuban airliner that killed 73 people, to the government of Venezuela. Not only has Mr. Posada has been living in Florida for many years, he has at times worked for the U.S. government since escaping from a Venezuelan jail. Shortly after escaping prison (allegedly thanks to bribes paid by members of the Miami Cuban exile community) he was hired to work on Oliver North’s illegal Nicaraguan Contra supply network, and is suspected of involvement in an attempt to assassinate Fidel Castro in 1994 and a string of tourist-hotel bombings in the Havana area in 1997.

Mr. Posada, who trained with the CIA in the 1960s, gave an interview to three major U.S. newspapers in 1997 in which he admitted to some of activities. Writing about this topic in 2002 in an article published in BigCityLit, I wrote:

“The Miami Herald, Los Angeles Times and New York Times reported Posada’s revelations, which detailed a series of bombings and other terror acts and connections with Cuban exile groups in Miami. Posada, then 70 years old, ‘revealed that key Cuban American lobbyists in this country financed his activities, in apparent violation of U.S. law, while the FBI and CIA looked the other way,’ according to a Los Angeles Times report.”

The National Security Archive, a project of George Washington University that publishes declassified U.S. government documents, provided further details in 2005:

“The National Security Archive today posted additional documents that show that the CIA had concrete advance intelligence, as early as June 1976, on plans by Cuban exile terrorist groups to bomb a Cubana airliner. The Archive also posted another document that shows that the FBI’s attaché in Caracas had multiple contacts with one of the Venezuelans who placed the bomb on the plane, and provided him with a visa to the U.S. five days before the bombing, despite suspicions that he was engaged in terrorist activities at the direction of Luis Posada Carriles. …

“[A] report from the State Department’s Bureau of Intelligence and Research on the bombing of Cubana flight 455 … noted that a CIA source had overheard Posada prior to the bombing in late September 1976 stating that, ‘We are going to hit a Cuban airliner.’ This information was apparently not passed to the CIA until after the plane went down. There is no indication in the declassified files that indicates that the CIA alerted Cuban government authorities to the terrorist threat against Cubana planes.”

They said he’s a terrorist, but gave him a pardon anyway

The Cuban and Venezuelan governments have long requested extradition of Mr. Posada, to no avail. Another Cuban exile leader, Orlando Bosch, was granted a pardon by President George H.W. Bush in 1990 and lived free in the U.S. for three decades until dying in 2011. Mr. Bosch was also suspected in the Cuban airline bombing and in a series of other terroristic acts. Duncan Campbell, writing in The Guardian, reported a decade ago on him:

“According to US justice department records: ‘the files of the FBI and other government agencies contain a large quantity of documentary information which reflects that, beginning in the early 1960s, Bosch held leadership positions in various anti-Castro terrorist organisations. … Bosch has personally advocated, encouraged, organised and participated in acts of terrorist violence in this country as well as various other countries.’ ”

Lest we be tempted to chalk the above up simply to the U.S. government’s bipartisan obsession with Cuba, we’ve only scratched the surface of U.S. hypocrisy over the “rule of law.” Bolivia, for example, has requested extradition of former president Gonzalo Sánchez de Lozada. At the time already responsible for the deaths of dozens of protestors, President Sánchez sent his security forces to put down a peaceful rally opposing the selling off of Bolivian gas reserves; 67 were killed and more than 400 injured. He later fled into exile and was formally charged in 2007 with genocide.

The Obama administration refuses to send him back. A report by Glenn Greenwald in The Guardian states:

“Bolivia then demanded his extradition from the US for him to stand trial. That demand, ironically, was made pursuant to an extradition treaty signed by Sánchez de Lozada himself with the US. … The view that Sánchez de Lozada must be extradited from the US to stand trial is a political consensus in Bolivia, shared by the government and the main opposition party alike. But on [September 7, 2011], the Bolivian government revealed that it had just been notified by the Obama administration that the US government has refused Bolivia’s extradition request.”

Then there is Warren Anderson, former chairman of Union Carbide, who is wanted in India in the wake of the explosion of his company’s Bhopal pesticide plant that killed thousands of people and injured tens of thousands. Indians courts have issued warrants for his arrest, which have been met with silence while he shuttles between houses on the U.S. East Coast.

It’s not only terrorists and corporate criminals who enjoy safe havens in the United States. Amnesty International, in a 2002 report, US is a ‘Safe Haven’ for Torturers Fleeing Justice, estimated that at least 150 torturers were living in the county then, none of whom was brought to justice. The number of torturers that the U.S. has trained, at its School of the Americas at Fort Benning, Georgia, is far higher. At the SOA (currently operating under the name of “Western Hemisphere Institute for Security Cooperation”) the U.S. Army trains Latin American military and police officers in torture techniques as part of its curriculum; the countries with the worst human rights records consistently send the most trainees.

If they don’t like terrorists, why do they train them?

The watchdog group School of Americas Watch, in an investigative report written by Bill Quigley, summarizes the work of the SOA:

“[G]raduates of the SOA have been implicated in many of the worst human rights atrocities in the Western Hemisphere, including the assassination of Catholic bishops, labor leaders, women and children, priests, nuns, and community workers and the massacres of entire communities. Numerous murders and human rights violations by SOA graduates have been documented in Bolivia, Chile, Colombia, El Salvador, Guatemala, Honduras, and Paraguay among others. These horrendous acts correspond to part of the school’s curriculum: systematic use of torture and executions to neutralize dissidents.” [page 2]

An article in The Washington Post, a newspaper (despite its long-ago Watergate reporting) that often acts as if it were an official publication of the U.S. government (and which has eagerly joined in the attacks on Edward Snowden), nonetheless reported straightforwardly on the use of torture manuals released by the Pentagon under pressure:

“U.S. Army intelligence manuals used to train Latin American military officers at an Army school from 1982 to 1991 advocated executions, torture, blackmail and other forms of coercion against insurgents, Pentagon documents released yesterday show. Used in courses at the U.S. Army’s School of the Americas, the manual says that to recruit and control informants, counterintelligence agents could use ‘fear, payment of bounties for enemy dead, beatings, false imprisonment, executions and the use of truth serum.’ ”

That was the summation of a newspaper that ordinarily rushes to defend U.S. foreign policy. The techniques it described were not a small part of the curriculum, nor an aberration, as the Post article implied in an attempt to soften the revelation. A former SOA instructor, Major Joseph Blair, told The Progressive:

“I sat next to Major Victor Thiess who created and taught the entire course, which included seven torture manuals and 382 hours of instruction. … He taught primarily using manuals which we used during the Vietnam War in our intelligence-gathering techniques. The techniques included murder, assassination, torture, extortion, false imprisonment. … Literally thousands of those manuals were passed out. … The officers who ran the intelligence courses used lesson plans that included the worst materials contained in the seven manuals. Now they say that there were only eighteen to twenty passages in those manuals in clear violation of U.S. law. In fact, those same passages were at the heart of the intelligence instruction.” [“School of the Americas Critic,” July 1997]

He killed 1,000 a month, but he’s ‘dedicated to democracy’

The SOA continues to operate. One of the graduates of the school is Efrain Ríos Montt, the most blood-thirsty of a series of brutal dictators who ruled through terror in Guatemala. Each of these dictators ruled with the full support of the U.S. following the CIA-organized overthrow of the democratically elected Jacobo Árbenz Guzmán at the behest of the United Fruit Company, which had previously been the country’s de facto ruler. The succession of dictatorships killed more than 200,000 Guatemalans. The régime of President Ríos Montt murdered more than 1,000 people a month during 1982, with Ríos Montt himself hailed by U.S. President Ronald Reagan as “totally dedicated to democracy” and unfairly the target of “a bum rap.”

Simultaneously, the Guatemalan military intensified its assaults on Indigenous communities. For example, SOA Watch reports, a Guatemalan special forces unit with extensive ties to the SOA, the Kaibiles, carried out this operation:

“[The unit] entered the village of Las Dos Erres, systematically raped the women, and killed 162 inhabitants, 67 of them children. Current President of Guatemala Otto Peréz Molina, also a graduate of the SOA, spent much of his time in military service as a member of the Kaibiles. This military unit was developed by the Guatemalan government in 1974, and its initial leader was a fellow SOA graduate.”

Among the techniques used by Guatemala’s dictators, according to the book Harvest of Empire: A History of Latinos in America by Juan Gonzalez, were dropping mutilated bodies from helicopters into crowded stadiums and cutting out the tongues of people who inquired about the “disappearances” of friends and family.

And let us not forget the loyal sidekick of the U.S., Great Britain, which seeks to extradite WikiLeaks founder Julian Assange to Sweden merely for questioning at the same time it refuses to extradite a convicted pedophile, Shawn Sullivan, to stand trial in Minnesota, claiming that the U.S. justice system has a civil commitment program for sex offenders that is too draconian. The Daily Kos reports that the suspect is charged with raping a 14 year old girl and sexually assaulting two 11 year old girls in 1994, but escaped to Ireland.

In no way is Edward Snowden, a whistleblower who has provided a service to humanity, comparable to the murderous rouges gallery described in this article, but the Obama administration might want to meet its obligations under international law before it further strong-arms other countries. But then “rule of law” in a world in which force maintains vast inequality is a euphemism for “rule of the most powerful.”

Spying? Who cares? Profits are at stake!

Actions do speak louder than words, and thus the start of European Union-United States trade talks as previously scheduled would seem to hold more weight than European political leaders’ displays of public anger at the extent of the spying against them.

Resignation to their subordinate status, the extent of their own spying networks and the knowledge that considerable dirty work is necessary to remain a leading capitalist country are among the contradictory factors at work here. So, too, is a willingness by European leaders to rely on the U.S. to perform much of the dirty work, while European big business needs to sell to U.S. consumers. Business is business at the end of the day. Or at the (hoped) end of the scandal.

With the stream of new revelations showing no signs of stopping, the end of the scandal does not appear anywhere in sight. Nor does the spectacle of contradictory behavior by European countries, most dramatically exemplified by France.

Navy communicationsOn the one hand, the French government declared revelations that the U.S. has spied on E.U. offices and computer networks “completely unacceptable” and demanded a delay in the start of the E.U.-U.S. trade talks, intended to form a “Transatlantic Trade and Investment Partnership.” Yet France not only meekly agreed to the trade talks beginning on time but acceded to U.S. arm-twisting that it close its air space to the plane carrying Bolivian President Evo Morales on the mere suspicion that whistleblower Edward Snowden was aboard.

How much of the complaints from France, Germany and elsewhere in Europe are posturing and how much is genuine anger is an open question, but perhaps ultimately irrelevant. Le Monde has revealed that the France intelligence agency DGSE spies on the French public’s phone calls, e-mails and Internet activity in a manner similar to that of the U.S. National Security Agency (NSA). And Mr. Snowden has revealed that German spy agencies are “in bed together” with U.S. spy agencies.

The chief of Germany’s foreign intelligence agency has confirmed that his agency works closely with the NSA, Der Spiegel reports, with the U.S. agency using several German locations to engage in data collection. The arrangement is justified by the “fight against terrorism,” the favorite all-purpose excuse to trample constitutional norms and privacy concerns, both of which tend to be taken more seriously among Europeans than United Statesians. In its report, Der Spiegel asked:

“Is it really conceivable that the German government knows nothing of what the NSA is doing on its own doorstep? Last month Interior Minister [Hans-Peter] Friedrich said in a parliamentary debate on the NSA snooping: ‘Germany has fortunately been spared big attacks in recent years. We owe that in part to the information provided by our American friends.’ Sentences like that reveal a pragmatic view of the US surveillance apparatus: What the NSA gets up to in detail is secondary — what counts is what its snooping reveals. And that information, intelligence officials admit, is indispensable.”

The German government sees itself as dependent on the U.S., and that counts for more than public displays of anger that culminated in a German minister condemning revelations of U.S. spying on Germany as “methods used by enemies during the Cold War.” Whatever momentary anger her government may have felt, Chancellor Angela Merkel has not wavered in her support for the Transatlantic Trade and Investment Partnership (TTIP) talks. Germany’s economy, after all, is dependent on exports — increasingly so during the past decade as German workers have absorbed a decade of wage cuts — and German manufacturers are likely salivating at the thought of increased exports to North America.

You can be angry, but you’re still subordinate

After all the displays of anger and assertions of sovereignty, European government showed themselves not only subordinate to the U.S. but to their own industrialists and financiers. The U.S. government is similarly a captive of its own big business interests — that is what right-wing calls to “starve” government are about. It was all smiles on July 8 as the TTIP talks began, on schedule, with embarrassing discussions of spying relegated to a “parallel” track, separate from what really counts, the main negotiations to dismantle regulations.

Both newly seated U.S. Trade Representative Michael Froman and European Trade Commissioner Karel De Gucht made the ritualistic grand claims of the benefits that will fall from the sky if the TTIP is implemented, and business groups competed with themselves to issue the highest “estimates” of the increase in wealth. The Centre for Economic Policy Research in London, for example, claimed the TTIP would stuff pockets with more than US$100 billion a year from added growth.

Similar pie in the sky promises were made for the North American Free Trade Agreement and many other trade deals, so, dear reader, all is forgiven if you are skeptical about such claims. “Free trade” agreements elevate corporations and investors to equal status with governments on paper, and above governments in reality because disputes between businesses and governments are sent to unaccountable tribunals controlled by organizations like the World Bank and in which the judges are frequently lawyers who specialize in representing corporations in disputes with governments.

Ambassador Froman, the new U.S. trade representative installed by the Obama administration, will not represent any change in direction. The American Enterprise Institute, a leading lobbyist for multi-national corporations, gave its seal of approval:

“No white smoke floated up from the White House when the president announced that he had chosen deputy security adviser Michael Froman as the new US Trade Representative; but there was a huge, collective sigh of relief from all elements of the US business and trade policy communities. … Michael Froman is an excellent choice. He is close to the president, was deeply involved in passage of the Bush [free-trade agreements] with [South] Korea, Colombia, and Panama.”

Ambassador Froman’s neoliberal credentials are assuredly in order. He worked as chief of staff to former Treasury Secretary Robert Rubin, who played a leading role in the Clinton administration’s deregulation of the financial industry, and before that was a managing partner at Citigroup. He seems to have done well at Citigroup, receiving more than $7.4 million from the company from January 2008 to when he joined the White House early in 2009, including a year-end bonus of $2.25 million.

Full speed ahead! The U.S. Chamber of Commerce — a hard-line organization that has never seen a regulation it likes or a tax that is justified — had already called for a speedy agreement before any pesky elections get in the way. Eurochambres had declared that it sought “the highest possible standards of protection for investors” — thinly disguised code for an elimination of rules and regulations. As Systemic Disorder has previously noted, the Trans-Pacific Partnership, intended to go beyond NAFTA and formally codify the maximization of corporate profits as the central principle of governments, is the model for the TTIP, and it is unlikely that it is a coincidence that the two giant trade pacts are being negotiated simultaneously.

Some country has to be the top dog

The growth of spying operations and the shrinking of democratic spaces that accompanies bilateral and multilateral trade agreements progress hand-in-hand. The capitalist system has always required a center to hold it together. Capitalism has had a succession of dominant centers; each successive center has been bigger to be able to cope with increasingly complex tasks.

When London succeeded Amsterdam as the financial center, the financial center became located within a country with a powerful military, not only a large merchant fleet as Amsterdam’s United Provinces possessed. When New York succeeded London, the country at the center became continental in size, possessing a military that can be projected around the world, further intensifying the links between financial and military power that had solidified during Britain’s rise to dominance.

The projection of, and willingness to apply, force is crucial to the maintenance and expansion of the capitalist system. That force nowadays may be more often financial and commercial rather than military, but the military and intelligence services are in reserve. From the dozens of coups in Latin America to the forcible installation of regimes willing to do U.S. bidding in Iran and Iraq decades apart to propping up dictatorships around the world, the common thread has been using power to gain advantage for U.S. multi-national corporations. “Free trade” agreements are another methodology to the same goal.

All of the world’s advanced capitalist countries are a part of this system. They acquiesce in it however much they sometimes chafe at their subordinate status (in relation to the U.S.); their willingness to enter into trade pacts binds them to the dominant power. No single country is large enough or possesses a big enough military to challenge U.S. domination; today, only a unified Europe could challenge U.S. hegemony. European capitalists desire the ability to challenge the United States for economic supremacy, but cannot do so without the combined clout of a united continent.

The E.U., in its current capitalist form, is a logical step for business leaders who desire greater commercial power on a global basis: It creates a “free trade” zone complete with suppression of social accountability while giving muscle to a currency that has the potential of challenging the U.S. dollar as the world’s pre-eminent currency.

Thus the proposed TTIP is in the interest of industrialists and financiers on both sides of the Atlantic Ocean at the same time that its approval would spell disaster for working people — more concentration of power in the biggest corporations; less ability for citizens to influence government policy; and weaker labor, safety and environmental regulations. Concentration of power and shriveling of democracy can’t be accomplished without a stifling of dissent, which in turn requires, inter alia, more spying and less accountability by spying agencies.

There are common interests at the same time that spying is also deployed to gain competitive advantages for favored corporations; the latter is exemplified by U.S. bugging of E.U. offices. Those shared interests in maintaining the system, however much the advanced capitalist countries may compete, tend toward cooperative relations. Thus although countries like France and Spain demonstrate their subordinate status in humiliating fashion by closing their air spaces under U.S. orders, the blocking of President Morales’ plane is not reducible to only that subordination; European governments have shared interests in maintaining the system. That force is what maintains it speaks for itself.

The intellectual dead end of liberalism

The vacuous concept of the “third way” having degenerated into neoliberal idolatry, modern liberalism has reached its end. Sweeping pronouncements are ordinarily to be avoided, but the revelations of not only the Obama administration’s extraordinary spying campaign but the Democratic Party marching in lockstep with Republicans to celebrate it ought to be the coup de grâce.

(I’m using North American terminology for today; readers in the rest of the world can substitute “social democratic” for “liberal.”) Some difference remains between Democrats and Republicans on social issues, but that gap is shrinking and exists at all only due to social activism. Without pressure from below, that difference might not amount to much, either. The difference arises from the extraordinary social extremism of U.S. conservatism, unique among the mainstream parties of the world’s advanced capitalist countries.

PentagonNorth American liberals and European social democrats have a long history of capitulation — we see the same patterns, whether it is Bill Clinton (and now Barack Obama) in the United States, Tony Blair in Britain, Gerhard Schröder in Germany, Jean Chrétien in Canada & etc. There is something much larger at work than President Obama’s lack of resolve. The sobering conclusion is that his world view is not so different from that of George W. Bush. Democrats have much in common with Republicans.

But, but, but — what about Washington’s notorious gridlock? The rewards of office are at stake and, just like professional athletes, professional politicians who make it to the top levels are highly competitive. They like to win, a rather human emotion, and with a distinct lack of seriousness in tackling any real issue — political, economic or environmental — winning is about the only thing that matters. Fight, team, fight!

The Obama administration’s record

Liberalism has ceased to possess ideas, however much individual liberals may yearn for alternatives. A partial list of Obama administration “achievements” makes for depressing reading:

  • Not simply keeping the Guantánamo Bay gulag open but force-feeding prisoners (torture by any realistic standard).
  • Stepping up the war against dissent through violent suppression of the Occupy movement organized by the Department of Homeland Security, waves of arrests and harassment of anarchists in the Pacific Northwest and harsh reprisals against government whistleblowers, among other offensives.
  • Widespread collection of telephone calls.
  • The gargantuan collection of personal information from online communications.
  • A president arrogating to himself the right to unilaterally kill people anywhere in the world, without a pretense of legal procedure.
  • A continual weakening of women’s fundamental rights to control their own bodies, often by making unilateral capitulations to Republican demands before negotiating.
  • A total failure to reign in “too big to fail” banks and a total failure to prosecute any financial industry executive for the chicanery that precipitated the financial collapse of 2008 and the ongoing stagnation.
  • Unquestioning acceptance of financial industry perspectives on economic matters.
  • Elevation of corporate maximization of profits above all other human considerations, embodied in a steady stream of one-sided trade agreements, the most dangerous one yet the Trans-Pacific Partnership being negotiated in secrecy, with only corporate executives privy to the text.

Let’s not pin this on the personality of one person. Each fresh outrage by the Obama administration is met by a shrug of the shoulders or outright support by Democrats. They are nearly unanimous in their approval of the National Security Agency. They are already united behind policies that exist, regardless of the ideology attached to them, to funnel ever more wealth upward. These two tendencies are not independent of one another.

There are various reasons that can be assigned as to the cause of the Democratic Party’s — and, thus, liberalism’s — steady march rightward: Dependence on corporate money, corruption, domination of the mass media by the Right, philosophical and economic myopia, cowardliness. Although these factors form a significant portion of the answer to the puzzle, an underlying cause has to be found in the exhaustion of North American liberalism. Similar to social democracy, it is trapped by a fervent desire to stabilize an unstable capitalist system.

The political and intellectual leaders of liberalism believe they can discover the magic reforms that will make it all work again. They do have criticisms, even if they are afraid of saying them too loud, but are hamstrung by their belief in the capitalist system, which means, today, a belief in neoliberalism and austerity, no matter what nice speeches they may make.

The Right, on the other hand, loudly advocates policies that are anathema to the working people who form the overwhelming majority but have the mass media, an array of institutions and the money to saturate society with their preferred policies. But, perhaps most importantly, they have something they believe in strongly — people who are animated by an ideal, however perverted, are motivated to push for it with all their energy.

In contrast, those who are conflicted between their belief in something and their acknowledgment that the something needs reform, and are unable to articulate a reform, won’t and can’t stand for anything concrete, and ultimately will capitulate. When that something can’t be fundamentally changed through reforms, what reforms are made are ultimately taken back, and society’s dominant ideas are of those who can promote the hardest line thanks to the power their wealth gives them, it is no surprise that the so-called reformers are unable to articulate any alternative. With no clear ideas to fall back on, they meekly bleat “me, too” when the world’s industrialists and financiers, acting through their corporations, think tanks and the “market,” pronounce their verdict on what is to be done.

Suppressing dissent is big business

And let us not be fooled by libertarian opposition to government spying; libertarians are among those most strongly rooted in the system. Although any opposition to the National Security Agency’s Stasi state is welcome, libertarians are motivated by an irrational hatred of government — they would rather have the market decide all social questions. But the market is merely the aggregate interests of the most powerful industrialists and financiers. Moreover, the market has already weighed in — security is big business, a high-profit sector worth hundreds of billions of dollars a year that exists solely as the result of government largesse.

City police departments are now equipped as armies; a web of federal agencies works closely with local law enforcement focused on squelching dissent; and seemingly bottomless sums of money are doled out to finance a network of spying agencies, a proliferation of cameras in public spaces and the militarization of police departments and investigatory agencies.

That is big business, indeed, as a quick summary demonstrates:

  • Lockheed Martin, a military contractor, earned US$2.7 billion on revenues of $47 billion. More than 80 percent of its revenue comes from the U.S. government, mostly from the Department of Defense.
  • Northrop Grumman, a military contractor, earned $2 billion on revenues of $25 billion. Most of its business is with the U.S. government, with much of the rest from various other governments.
  • Boeing, a producer of military aircraft and missile equipment, earned $3.9 billion on revenues of $81 billion. The U.S. government is a primary customer.
  • Booz Allen Hamilton earned $219 million on revenues of $5.8 billion. One-quarter of its revenue came from work for U.S. spying agencies and 98 percent of its revenues comes from work for the U.S. government. Booz Allen had employed whistleblower Edward Snowden.

U.S. government military spending for fiscal year 2014 is projected to account for more than $1.3 trillion, or 47 percent of the federal government’s budget, according to an analysis prepared by the War Resisters League. (The War Resisters calculation includes past military spending not counted toward the regular military budget by the government.)

A government is not an abstract entity; it is an expression of the social forces within a society. The U.S. government — the Obama administration, past administrations and the “permanent government” of the security apparatus and the various bureaucracies — is the enforcer for industrialists’ and financiers’ dominant institutions — corporations — and many of those corporations profit handsomely from the equipment, materiel and services they sell to the government that provides their muscle. This is bankrupt, whether the liberal or conservative version.

History, subordination weigh heavily on unfinished Arab Spring

As exhilarating as it was for the people in Tahrir Square to have forced out Hosni Mubarak, that was the easy part. Dismantling a dictatorial system is much more difficult than seeing off a particular dictator.

This is the reality that Egyptians, and participants in other countries comprising the Arab Spring, continue to face. The dictator does not sit suspended above all of society, but rather rules with the support of a social base. Not rarely the dictator, when in the global South, is supported (and even reliant on) an imperial power with its own agenda. The United States government, whether the occupant of the White House is a Republican or a Democrat, has kept dictators in power throughout the world — the U.S. has militarily intervened in Latin America or the Caribbean 96 times, including 48 times during the 20th century. That total doesn’t include coups fomented by the U.S., such as Guatemala in 1954 and Chile in 1973.

Tahrir Square photo by Jonathan Rashad

Tahrir Square photo by Jonathan Rashad

The leading powers of capitalism were quite comfortable with the pre-Arab Spring status quo and, most notably in the case of the U.S. government, did little to discourage the idea that they’d prefer to keep things as they had been. But this is not to suggest that internal factors should be ignored. The same judges appointed by former President Mubarak preside; the Army continues to impose its will in the judicial and economic spheres; and the Muslim Brotherhood seems comfortable stepping into the shoes of the former régime. The economy continues to not function but the priority among Egypt’s elites is to jockey for power.

The military was the crucial social force on which the dictatorship of Anwar Sadat and Hosni Mubarak rested and, having accumulated significant economic interests to go along with their powers of coercion, is not inclined to loosen its grip. This source of power survived the removal of President Mubarak intact — augmented by the continuance on the bench of the Mubarak-era judges, the pillars of the dictator’s system remain in place. And although the Muslim Brotherhood would likely prefer the power of the military and the judiciary trimmed, it nonetheless appears content to simply place itself at the apex of this system and govern, to the ability it is able, with its own heavy hand.

The imperial powers, needless to say, are not eager for too much democracy in the Arab world, lest their ability to keep their grip on the region’s oil supplies loosen. But the greed of Western oil majors sometimes can backfire. A June 2 article in The New York Times reported that China is reaping the benefits of increased Iraqi oil production, buying half of Iraq’s oil and seeking more. The U.S. failed to gain complete control of Iraq’s oil as it had intended, and the measure of relative independence shown by the Iraqi government resulted in Baghdad setting tougher contract terms than Western oil companies would prefer.

The result, according to the Times, is that Chinese companies have accepted the lower profits resulting from the stricter Iraqi terms, content to secure needed supplies rather than maximize profits. Of course, although oil was a factor in the invasions of Iraq by the Bush I and Bush II/Cheney administrations, bringing Iraq (and, ultimately, the rest of the region) firmly into the U.S. orbit and forcing them open to unfettered penetration by multi-national corporations was a paramount goal. Naturally, this was to have been on a subordinate basis. There is a long history here, starting with the British crushing of Egypt’s attempt to industrialize in the 19th century.

First by military means, then by financial means

Although still formally a part of the Ottoman Empire, Egypt gained considerable autonomy after an Ottoman military commander, Muhammad Ali Pasha, became the ruler of Egypt following the departure of French forces under Napoleon Bonaparte. The new Egyptian leader, after securing power through a massacre of a rival group, embarked on a policy of industrialization and commodity agriculture to facilitate his a goal of Egyptian independence.

Cultivated lands were expanded and crops were grown specifically for export, most importantly cotton. The new strain of cotton he ordered planted was to be the cash crop used to finance Egypt’s economic rise. Lowell Lewis, an agricultural scientist, summarized this process:

“Since British textile manufacturers were willing to pay good money for such cotton, Ali ordered the majority of Egyptian peasants to cultivate cotton at the exclusion of all other crops. At harvest time, Ali bought the entire crop himself, which he then sold at a mark-up to textile manufacturers. In this way, he turned the whole of Egypt’s cotton production into his personal monopoly.”

Had Muhammad Ali been content to be a supplier of a raw material (in this case, cotton), he likely would not have incurred the wrath of the British. But he also was committed to industrial development. Factories in several industries were set up, including textile, and foreign trade monopolies were established. To stop the flood of British textiles imported into Egypt, embargoes were put in place. Britain did not want this competition, ultimately crushing the rise of Egypt through a mix of military and financial means.

Egypt’s ambitious ruler, despite being a viceroy for a province of the Ottoman Empire, built a large army that was used in a series of invasions, expanding his areas of control from Sudan to Syria. Britain had adopted a policy of propping up the Ottoman Empire; a weak but intact empire would suit Britain’s strategic and commercial interests. When Muhammad Ali’s army approached Istanbul, the Ottoman capital, several European powers came to the aid of the Ottomans, handing Egypt’s ruler a decisive defeat. In 1841, he was forced to sign a treaty specifying that Egypt would adhere to “free trade” policies, ending his monopolies and allowing Egypt to be flooded with cheap British imports, decimating Egyptian industry.

Egypt’s peasants had borne much hardship under the pre-1841 policies; they would now suffer more under heavy burdens of debt and taxation, while elite landowners who came to own most of Egypt’s farmlands were taxed at a small fraction of the peasants’ rate. Muhammad Ali had handed much of the elites’ land to them, and his successors continued to oversee a consolidation of land.

That was one component of the 19th century version of neoliberalism, although the term had not yet been coined. Another component was the debt that ensnared Egypt. Muhammad Ali’s grandson, Ismail, sought to modernize Egypt along European lines during his reign in the 1860s and 1870s. But the country went deep into debt to finance this program. Egypt could not even pay the interest, let alone the principal. Rather than risk a repudiation of the debt, the German and French governments forced Ismail to appoint British and French commissioners to oversee Egyptian finances to guarantee that the debt was paid.

As an example, in 1873, the Egyptian government accepted a loan with a face value of £32 million but received only £9 million because of conditions placed on the loan by the lenders — yet had to repay the full face value. Reduced to an exporter of raw materials as the British had intended, and thus overly dependent on volatile cotton prices, by 1877 more than 60 percent of all Egyptian revenue went to service the national debt. Within another five years, Britain’s direct occupation of Egypt had begun.

The players change, but the game does not

Following World War I, Britain maintained tight control of Egypt’s cotton exports, which accounted for 90 percent of Egypt’s exports. Even after Egypt gained independence after World War II, imperialist intrigue did not end. The British and French governments, in collusion with Israel, invaded Egypt in an attempt to seize the Suez Canal and overthrow Egyptian leader Gamal Abdel Nasser. A series of diplomatic maneuvers had led President Nasser to nationalize the Egyptian company that operated the canal, with payments to shareholders at full market prices.

Following British and French withdrawal in the face of international opposition to the invasion, including by U.S. President Dwight Eisenhower, President Nasser proceeded to nationalize British and French assets. He also embarked on plans to industrialize the country and redistributed land. But a decisive loss in the 1967 war with Israel, by then strongly backed by the U.S., undermined the president and weakened the economy. Anwar Sadat became president in 1970, and was rewarded for his re-aligning the country toward the U.S. from the Soviet Union with heavy aid.

Since then, Egypt has been dependent on U.S. aid and, in turn, the country was ruled almost continuously under emergency laws until the fall of Hosni Mubarak. The U.S. provided $1.47 billion in foreign aid to Egypt in 2011, $1.3 billion of which was military assistance. U.S. military-assistance programs have the goal of inducing recipients to align their policies with U.S. wishes, and much of it is specifically earmarked for the recipient to buy arms from U.S. companies. Thus recipient militaries are able to buy materiel that wouldn’t otherwise be able to, and U.S. arms manufacturers’ profits are subsidized.

The size of the military’s share of Egypt’s economy remains a subject of considerable controversy but, whatever the figure, is substantial. The last years of the Mubarak era saw a decisive turn to neoliberal prescriptions; although the military might have seen privatization schemes as a threat to its commercial interests, the post-Mubarak military command, which appears to possess decisive political power even after the ascension of Mohamed Morsi to the presidency, reached a tentative agreement (not yet ratified) with the International Monetary Fund, attached to the usual austerity conditions.

The Egyptian military has expanded into shipbuilding, railroad cars, real estate development, heavy equipment leasing and military materiel. It also is a part owner of companies in a variety of other industries, including computers and oil and gas pipelines.

The military and the Muslim Brotherhood are rivals for power, but whatever the differences between them, they have mutual interests in maintaining the status quo. The judiciary is another pillar of the old régime, and has flexed its muscles by issuing a series of rulings undermining the establishment of new institutions.

A United Nations report issued last month reports that more than 40 percent of Egypt’s population lives below the country’s poverty line of $2 per day, while two percent of the country’s population controls 98 percent of the economy; poverty, inflation and unemployment are steadily rising. A law passed by the military bans strikes, sit-ins and protests, and fewer Egyptians have access to health care because it is increasingly privatized. Meanwhile, Egypt’s Muslin Brotherhood-appointed prime minister announced this week that “there are no differences” between he and the International Monetary Fund concerning austerity measures the IMF is demanding in return for providing a loan.

Egypt’s generals want U.S. money and the Brotherhood promotes Turkey’s neoliberal Justice and Development Party as model. The military, the Brotherhood and the remnants of the Mubarak régime are the only institutions remaining, and the U.S. government can’t be displeased about that. It destroyed all Left entities that posed any threat, refusing to tolerate even nationalistic leaders whose “socialism” was limited to rhetoric, such as Gamal Abdel Nasser. Doing so was in the tradition of the previous leading capitalist power, Britain.

The inability of the Arab Spring, thus far, to bring about any meaningful reform, let alone revolutionary change, is inseparable from the region’s history and continued subordinate status in the world capitalist system.

Debt jubilee: Revolutionary change or reform to stabilize capitalism?

Debt has been a crucial lever in implementing austerity, both as an instrument and a moral cudgel. Eliminating debt, private and public, would have transformative effects — but would doing so be revolutionary or merely a reform to stabilize world capitalism?

Those are not the only two choices, of course, and the mere thought of a debt jubilee would send many a set of teeth gnashing. Debt jubilees are not a new idea; in fact they have existed since long before capitalism was born. But given the unprecedented level of debt, a jubilee today would entail unprecedented complexity.

The Australian economist Steve Keen has for several years energetically promoted the concept of a debt jubilee. His concept is to bail out people instead of banks, reasonably arguing that people would spend the money, reviving the economy. So in this formulation, radical as the concept of a jubilee is (and radical as the idea of helping working people instead of the super-wealthy is), it is conceived as a reform.

Professor Keen conceptualizes a jubilee in a form that would not cause damages to debt holders not responsible for the crisis, such as pension funds:

“Whereas only the moneylenders lost under an ancient Jubilee, debt cancellation today would bankrupt many pension funds, municipalities and the like who purchased securitized debt instruments from banks. I have therefore proposed that a ‘Modern Debt Jubilee’ should take the form of ‘Quantitative Easing for the Public’: monetary injections by the Federal Reserve not into the reserve accounts of banks, but into the bank accounts of the public — but on condition that its first function must be to pay debts down. This would reduce debt directly, but not advantage debtors over savers, and would reduce the profitability of the financial sector while not affecting its solvency.”

large money bills“Quantitative easing” is a government program of massive buying of assets from banks in an effort to promote increased lending and liquidity through increasing the money supply. A “quantitative easing for the public” would give money to everybody. Those with no debt would be free to spend it as they wish, and those who received more money than the size of their debt would similarly have no obligations once they wiped out their debt. Dramatic as this idea is, Professor Keen is no revolutionary; he seeks to put capitalism on a firmer footing:

“Returning capitalism to a financially robust state must involve a dramatic fall in the level of private debt — and the size of the financial sector — as well as policies that return the financial sector to a service role to the real economy.”

His reasoning is that economic recovery is impossible until private and government debt is paid down:

“The standard means of reducing debt — personal and corporate bankruptcies for some, slow repayment of debt in depressed economic conditions for others — could have us mired in deleveraging for one and a half decades, given its current rate. … That fate would in turn mean one and a half decades where the boost to demand that rising debt should provide — when it finances investment rather than speculation — will not be there. The economy will tend to grow more slowly than is needed to absorb new entrants into the workforce, innovation will slow down, and justified political unrest will rise — with potentially unjustified social consequences. … We should, therefore, find a means to reduce the private debt burden now, and reduce the length of time we spend in this damaging process of deleveraging.”

A radical idea, then, to save the system. A radical idea that is not at all revolutionary in the hands of Professor Keen. Considering the mass political movement required to force what would be an extraordinary change in the policies of the world’s central banks and finance ministries — institutions staffed by and run on behalf of financiers — would we be simply content to say, “Well, that’s it, then, we can all go home now”?

Revolutions as ‘transformations of common sense’

The U.S. activist and economist David Graeber also calls for a debt jubilee but, in contrast, conceives this as a revolutionary demand. Writing in the latest edition of The Baffler, Professor Graeber argues that world revolutions consist “above all of planetwide transformations of political common sense.”

Drawing upon the works of “world systems” theorist Immanuel Wallerstein, he argues that the revolutions of 1848 were successful even though none took power because the ideas behind it and the French Revolution widely took root. He similarly sees Russia’s October Revolution as responsible for the New Deal and European welfare states and, on less firm ground, that 1968 “changed everything” because of the personal liberations that grew out of it, including feminism.

Fear of communist revolutions, and large mass movements, did lead to the many advances of the mid-20th century. But as most of those advances have been reversed, it is more realistic to see them as simply reforms — and reforms can, and will, be taken back when movements subside. People can’t stay in the streets forever. The changes of personal liberation spawned by 1968 and beyond are not as susceptible to reversal, and, as with LGBT movements, continue to advance in some ways but, nonetheless, feminist gains in particular are under sustained assaults.

We should be careful to differentiate advances that threaten the system — such as major structural changes in the economic sphere — and those that don’t, such as same-sex marriage or women shattering glass ceilings, however much individual religious fundamentals or tradition-minded men believe themselves to be “threatened.” In no way do I wish to minimize the social gains made by women, LGBT communities, and racial and national minorities, nor ignore that social divisions are integral to the functioning of any system based on inequality and hierarchy. Such freedoms — still only partially attained and still requiring organized defense — are prerequisites for any concept of a better world to have meaning.

Economic inequality has steadily widened as class repression intensifies; objectification of women in mass media is ubiquitous, as exemplified by the pornification and coarseness of corporate-controlled mass culture; and nationalist and other xenophobias are gaining new traction under the impact of economic disintegration and the accompanying social disruptions. It seems premature to declare everything has changed, even keeping in mind that leaps in social zeitgeists are a process rather than a sudden jump.

A jubilee linked to other demands

Given the interconnectedness of struggles, is the idea of a debt jubilee in itself a “revolutionary demand,” as Professor Graeber declares it? In other words, would it actually overturn the current world system, or would it be simply a reform, albeit a welcome and thorough-going one on the scale of the New Deal? He does link the idea of a jubilee with the necessity of slowing down growth:

“We seem to be facing two insoluble problems. On the one hand, we have witnessed an endless series of global debt crises, which have grown only more and more severe since the seventies, to the point where the overall burden of debt — sovereign, municipal, corporate, personal — is obviously unsustainable. On the other, we have an ecological crisis, a galloping process of climate change that is threatening to throw the entire planet into drought, floods, chaos, starvation, and war. The two might seem unrelated. But ultimately they are the same. What is debt, after all, but the promise of future productivity? … [Producing more is] precisely what’s destroying the planet, at an ever-increasing pace.”

Thus, Professor Graeber argues:

“Why not a planetary debt cancellation, as broad as practically possible, followed by a mass reduction in working hours: a four-hour day, perhaps, or a guaranteed five-month vacation? This might not only save the planet but also … begin to change our basic conceptions of what value-creating labor might actually be. … The morality of debt and the morality of work are the most powerful ideological weapons in the hands of those running the current system. That’s why they cling to them even as they are effectively destroying everything else. It’s also why debt cancellation would make the perfect revolutionary demand.”

Such an outcome would require an extraordinarily strong global movement; in this conception a debt jubilee would be a means to an end and linked to broader structural change. For a debt jubilee to be “revolutionary” it would have to be one piece of a more comprehensive struggle. A debt jubilee by itself, in isolation, would be, as Professor Keen intends, a method of stabilizing capitalism. Indeed, he has shown that a jubilee could be brought about using standard capitalist-management tools in a different way.

Saving the current world system would be a temporary salve and nothing more; all the contradictions within it would resurface. But that system is of human creation. When new ideas gain secure social foundations, revolutions can happen — whether it is sovereignty residing in the people rather than a royal family designated by a god, or that democracy is possible only with everyone able to participate on an equal footing rather than only men of a society’s dominant ethnic or racial group, or that political democracy is an empty shell without economic democracy.

A better world can only arise from unleashed human imagination and creating unbreakable links among struggles.