Richard Melson

January 2005

Lawrence Feiner

CAMBRIDGE FORECAST GROUP:

Rosa Luxemberg vs Donald Rumsfeld:

Why Bush's New Security Doctrine Can Only Lead To Disaster.

by L. Feiner

Most people are aware by now of the new Bush national security doctrine. Taking Afghanistan as the model, this doctrine involves toppling any regime that can conceivably threaten the United States and replacing it by chaos; the chaos to be controlled by smart bombs, special ops and deals with friendly warlords. This doctrine is sweetened by the promise of "democratization"; democratization meaning a puppet parliamentary government in the capital of the regime in question and feudal chaos everywhere else. Despite its stated goal of protecting Americans, this doctrine if carried to its logical conclusion can only lead to global chaos and to economic destitution and total lack of security for Americans.

This statement is true even if all the much vaunted objections to Bush's new security doctrine prove false, even if there is no "blowback" from this policy, even if there is no retaliation for future US actions, even if all foreign terrorist threats to the US are pre-empted, even if the world's other countries do not adopt the US doctrine of pre-emption as their own, even if the cost of the new doctrine does not prove prohibitive, and even if all future US foreign military actions succeed quickly and without complications. It is true because the new Bush security doctrine fails to address the main threat facing the US from the rest of the world. The new Bush security doctrine will fail less because of what it does, as bad at that is, then because of what it does not do.

To see why this is so, let's go back to a time, which in many ways, was very similar to the present one; namely the period before World War I. Then, as now, people were speaking about the necessity of war to preempt future danger from foreign powers. Then, as now, people were predicting that any war would have to be short; (industrialized war had simply become too costly to sustain for very long, and therefore the victor would be determined by whoever won the initial phase of the war). The danger was assumed to be, not the war itself, but the danger of losing it and becoming hostage to the winner. There was one person, however, who was predicting that war would be a long term calamity for the entire civilized world. This person was the most prominent European labor leader at the time, the Polish economist Rosa Luxemberg. Rosa Luxemberg was one of the few people to accurately predict just what a catastrophe World War I would turn out to be, and she tried unsuccessfully to prevent it by promoting simultaneous general strikes in the contending countries before the war began. Today she is regarded as a national heroine in Germany; the woman who tried to stop World War I..

Today, however, in contrast to World War I, the impending war is no contest between equally matched, well armed industrial countries in close proximity to eachother, but rather a war between the most powerful empire in history, the United States, on the one hand, and impoverished, decrepit countries in the poor world on the other. Too see why this impending war, like World War I, can only result in long term calamity, one has to go to another prediction made by Rosa Luxemberg, This second prediction has long fallen into disrepute, but it is extremely relevant today.

To oversimplify enormously (and to leave out technical details which most economists now regard as archaic and flawed) Rosa Luxemberg's prediction was that the growth opportunities in the industrial capitalist economies had played themselves out, and that the only way these countries could continue to grow economically was to expand into the vast preindustrial, precapitalist areas of the world. This expansion would theoretically come to an end when there were no preindustrial areas of the world left, but would more likely come to end in a calamitous war between competing colonizing powers long before it came to its theoretical limits. This point of view emerged again in the thirties when many economists talked about "mature economies" that could only grow slowly.

However, after World War II, this prediction was completely invalidated by events. New patterns of technologies and growth, automobilization, suburbanization, plastics, petrochemical byproducts, containerization, commercial air travel, computerization, data processing and networking, consumer electronics, etc. produced patterns of economic growth in the already developed economies that would have been unimaginable in the early twentieth century. Of particular importance in this growth was the growth of US economy. The weight of the US economy (with 5% of the world's population) in the global economy is impossible to overstate. After World War II, when the rest of the industrial world lay in ruins, the US economy was 50% of the world economy. 57 years later, after the rebuilding of Europe and Japan, after the "Asian miracles", after the "Green revolution" in the developing world, after the growth of the global population from less than 2 billion to 6 billion, (most of that occurring precisely in the preindustrial economies), the US economy was between 25 and 30% of the world economy.

Far from being dependent on foreign stimulus for its growth, the US economy was itself a major engine of growth for the rest of the world, particularly the developing world. Exports to the US, both legal and illegal, immigration to the US, both legal and illegal, investment outlets in the US, and remittances from emigrants in the US have to a large extent determined the patterns of growth in the less developed world. The US and the rest of the developed world, (comprising 20% of the human race), is the "locomotive" of global economic growth, and the developing world,. (comprising 80% of the human race) is the "caboose", turning Rosa Luxemberg's prediction on its head..

By the 1990's it had become an article of faith among business analysts and policy makers that technology-led economic growth was pretty much a permanent phenonenon in the US and that slowdowns in economic growth were merely cyclical phenomena. A steady progession of new technologies would arrive in a regular pattern to continuously provide new outlets for investment and growth. In the developed world at least, capitalism would never "run out of things to do"

As far as America's relations between the developing world were concerned, US economic growth was accepted as a given, and Third World poverty was seen primarily as a security, humanitarian and international public relations issue. In the 1956 Republican national convention, President Eisenhower "The United States cannot exist as an island of peace and prosperity is a sea of poverty and desperation". At the same convention, Herbert Hoover made a bizarre speech in which he said that aiding the newly independent poor countries in the Third World would help to inspire "a new American nationalism" which would protect American morale against the baleful effects of crime, communism and vulgarization of the American culture. During the 1960 TV debate between Kennedy and Nixon, Kennedy said that the US had to help poor countries to make sure that they didn't turn to Communism. Nixon responded that the US had to help the world's poor not only because of the cold war, but because it was the right thing to do. Recently, the Bush Secretary of Commerce Dale Evans said tht the US economy had shown itself to be extremely durable over the last century. He added that it could survive practically anything ( implying that an "era of permanent growth" was perfectly compatible with an "era of permanent war"). He cautioned however that global poverty was intolerable and had to be eliminated. [1]

(I stress these statements by assorted right wingers and reactionaries in order to highlight, by contrast, just how nasty and Malthusian is the rhetoric coming out of the Bush Defense Department)

After World War II, the US and the US dominated World Bank launched one "development crusade" after another in the Third World, examples being the "Alliance for Progress", followed by "Integrated Rural Development" and the "Green revolution", followed by "basic needs", followed ultimately by "neoliberalism"; the belief that the best way to promote Third World development was to rely on privatization, free cross border flow of commodities and capital , liberalization of national financial and currency markets and universal global economic competition, the so-called "NAFTA/WTO" approach to Third World development. The various development crusades naturally reflected the changing ideological and commercial interests in the United States. Neoliberalism for example reflected the US attitude of free market fundamentalism that began during the Reagan administration, and most Third World governments went along with it, because of the lure of access to the huge, wealthy and relatively regulation free US domestic market.

During all of this, US policy makers, retained an attitude of "official optimism" towards the prospects for successful development in the Third World, an optimism at least partially defensible by the partial successes which did occur in parts and in sectors of the Third World, the "Green revolution", the "miracle of the Asian tigers", the rapid growth in the coastal areas of China, the success of the Indian software industry.

During the Clinton administration, this official optimism reached its zenith. Clinton economic adviser Lawrence Summers said "that we have to stop viewing the Third World as a problem and start viewing it as an opportunity". Clinton maintained that the 21 century would be the "Asian century" and that Asia would be the locus of world economic growth and that US had to get in on the action early through trade agreement with Asia.. This was done to stem the American protectionist backlash against cheap Asian imports, but one gets the impression that Clinton himself actually believed it .. The 1990's became the era of bubbles, crashes and bailouts, first in Mexico, then in Asia, and finally in Russia and Brazil. Throughout it all, the Clinton administration maintained an attitude of blind, global economic optimism as persistent, strident, and impervious to evidence, as is Bush's war mongering of today.

It all finally culminated in the global financial crisis of 98, then the US internet bubble (financed by flight capital from the global financial crisis), then the internet crash, and then the globally destabilizing political meltdown in the Middle East..

After the victory of the Bush administration, the official US attittude towards Third World development turned to one of pessimism. Former Bush Secretary of the Treasury O'Neill said "we have no clear idea of why some countries develop and others to fail to develop". Last November at a Fortune Magazine Forum on Global Policy [2], Defense Secretary Rumsfeld was asked a question about "the causes of global poverty" Rumsfeld questioned the validity of of the statement that global poverty had a "cause", He maintained that poverty was the natural state of the human race and that the question should be why some countries escape it, and this was a question which had no easy answers.. The main point, Rumsfeld added, was for the United States to defend itself against whatever dangers or threats that the world's poor, in their frustration, might mount against the world's rich (the US and other First World countries). Seen in this light. the US military has now become a sort of global "swat team" which protects the rich first world against the vast global slum that surrounds it. The stated goal of the United States is now no longer to spread the benefits of capitalism and free enterprise to the rest of the world, but simply to protect the global minority which benefits from it against the vast global majority which suffers under it [3].

Through it all, long term US growth is assumed to be a given. [4] The current slowdown is cyclical according to the Bush administration, the unworking of a stock market bubble, the response to "geopolitical uncertainties", uncertainties which will be removed once successful regime change takes place in Iraq. And it is here, where the Bush security doctrine falls apart.

Because there are indications that Luxemberg's second prediction, while it may have been completely wrong a century ago, is now extremely relevant. First of all the developed world is now locked into an elaborate infrastructure of automobilization, suburbanization, vast highway networks, electric power grids and. petrochemical byproducts. This puts severe restrictions on the kinds of technologies that can be rapidly, commercially profitable. The technologies have to be immediately compatible with the existing infrastructure, they can not devalorize or render obsolete large parts of it. They must be environmetally sustainable, yet they cannot require massive, new multidecade infrastructural projects with uncertain commercial payoffs. They cannot simply replace labor but must rapidly provide new employment opportunities.( In other words a dramatic new life changing innovation due to nanotechnology, biotechnology, superconductivity, quantum computing or whatever which will materialize in a century is just not going to cut it. Capitalism needs its amphetemine shots at five to ten year intervals not in centuries) Second of all , the patterns of growth in the first world in the first world over the past 25 years have not been entirely driven by technology. They have been driven by global financial gimmicks that were unsustainable. First the Carter period of inflation-led growth, then the Reagan period of debt-led growth and finally the Clinton period of bubble-led growth. These were not "investment cycles" or "inventory cycles", but rather "gimmick cycles" and the US has run out of gimmicks. Thirdly, to some extent US growth patterns over the past 25 years were not entirely a refutation of the Luxemberg prediction but actually a reverse confirmation of it. Since 1970, the US population has gone from 200 million to close to 300 million. One hundred million people, mostly from the Third World have come into the United States, legally and illegally, some of them serving as virtual slave labor, and others moving up into the middle classes and providing new consumers and new outlets for investment.Instead of expanding into the Third World, the US economy has brought the Third World into it. Indeed, the US economy has become like a giant vacuum cleaner, moving across the face of global society, sucking in products, people and flight capital. This process can continue for a while, but it cannot go on indefinitely.

Thus, there was many indications that the 100 year old Luxemberg prediction has now finally come to pass. The US needs broad, autonomous, sustainable, environmentally sustainable [5], Third World growth, not dependent on the US economy in order to sustain its own economy. Failing this, the US economy will eventually falter for lack of outlets and will then not recover. Now to see where "Rumsfeldism" actually takes us in the long term, we only have to imagine the upheavals and chaos that will prevail in the US, with its culture of guns and violence, where it to go into a thirties style depression.

Thus, the main threat from the Third World, (the "Hobbesian realm of disorder" in the Rumsfeld worldview), is not that it will send radicals here to attack us ala 9/11, but that it will, over the next several decades, fail to develop its own internal markets not dependent on the US market, or that it will fail to develop altogether, or that it will actually implode into chaos, famine, pestilence and "die-off". and thus will ultimately drag the US economy down for lack of economic outlets. Then the US itself will become part of the "Hobbesian realm of disorder" and the safety of our own WMD will come into question.

Thus, the danger is less the military or terrorist threats emanating from the Third World, than it is the failure to secure its active cooperation in fending off the economic and environmental threats facing the entire human race.

Lance Feiner, PhD.,

March 2003

From 1979 - 1995, Lance Feiner was co-author of the Cambridge Forecast Reports, a monthly newsletter designed to bring executives timely advice on world economic changes and to predict their economic, political and social consequences for the future. He is also the co-author of numberous books and periodicals on global trends published in Japan and Korea. Publishers include PHP-Matsushita, Harcourt Brace Japan, Three "i" publications and the Energy Research Institute of the Foreign Ministry.

FOOTNOTES:

1. MSNBC 2/25/03

2. CSPAN 11/11/03

3. In fact, the collapse of the economic euphoria of the 1990's has led to a more general climate of pessimism about the prospects for the developing world. This has been further heightlighted by the recent UN population report which lowered future global population estimates because of HIV/AIDS and predicted negative population growth in many poor countries in the future. In fact, the concept of a "carrying capacity" for the planet which has already been exceeded by earth's current population has actually begun to make its appearance in some environmental circles.

4. There is a general, widespread belief, particularly in the United States, that any economic or environmental problem will eventually have a "technological fix" which will work in the United States at least. It is almost a kind of religion. And of course it has the advantage that it can never be disproven, nobody can predict future technology. In 1989, for example, there was widespread belief in the reality of the "cold fusion" phenomenon on the flimiest of evidence. In retrospect, the "cold fusion" euphoria was a direct reaction to the anxieties about fossil fuels and global climate change that manifested themselves after several years of record high global temperatures in the 80's. "Technohype" is usually a response to economic, social and political anxieties. In 1979-1980, after the Iranian revolution, and the oil price rise, there was a great deal of talk about genetically engineered "bacteria that produce" oil, and in the mid-80's, amid the anxieties about cheap imports from Asia, there was a great deal of ethusiasism about "intelligent robots". I leave to one side the racist imagery behind "bacteria that produce oil" as a substitute for Arab oil producing states, and "intelligent robots" as a substitute for cheap Asian labor. As for the "carrying capacity" arguments (the flip-side of technohype) these arguments always seem to apply to people in poor countries. The techno-hype paradise held out for people in rich countries, and the "carrying capacity" doom held out for people in poor countries have the advantage that they are based on facts of nature which are not yet known. Nobody can know what kinds of new technologies which will materialize and the mechanisms of global environmental change are imperfectly understood.

5. In his book Making Peace With The Planet, (1990) Pantheon Press, the environmentalist Barry Commoner, debunks the "carrying capacity" arguments and demonstrates how the earth can support many times its present population using environmentally friendly technologies. Many such technologies, while not profitable in the industrial countries, might be profitable in many developing countries, precisely because of lack competition from pre-existing infrastucture. The ultimate route to sustainable development for the world's poor countries is not to catch up with the rich countries, but to "do something different".