http://kalovski.blog.com/ en-US Fri, 26 Sep 2008 14:31:05 +0200 Fri, 26 Sep 2008 14:31:05 +0200 Blog.com http://kalovski.blog.com/3938409/ http://kalovski.blog.com/3938409/ The bail out of banks in the US is the biggest robbery in history that is done in a “legal” way. The bourgeois representatives of both parties here in the US joined hand together in exercising their power over the people coercing them to give in to wall street agenda. Installment arrangement, oversight commission proposed methods, mechanism and structures are blinding rationalizations.  For the truth of the matter the crisis of monopoly capitalism is so deep in fact. It is like a rocket going out of the earth in so much speed and coming to earth with the same speed to crush. It is only a matter of time that a deep escalation of so much joblessness will happen here. Thus the bourgeoisie wants us to believe that the situation is only a matter of greed or a situation out of control because of non-regulation. The 700 billion dollars serves only to patch a small hole in the dike to deter water from coming out but is immaterial with a coming storm effect that will even overturn dikes  totally washing out communities, like hurricane Katrina. We are asked to believe that the bourgeoisie have a strategic foresight when all they know is to exist daily amassing wealth, a contest of rats and the end of the day they are still rats. (read more, the article from Raymond Lotta, Wall Street Panics, Ruling Class Scrambles—Deepening Financial Crisis and Desperate Emergency Measures.

The events of the last week on Wall Street represent a new and more destabilizing phase of the turmoil gripping financial institutions and markets in the U.S. A financial crisis has been unfolding for more than a year. It is now the most serious financial crisis of U.S. capitalism since the Great Depression of the 1930s. And it is by no means contained or under control.

The financial edifice of U.S. imperialism is in danger of crumbling. And the U.S. ruling class is cobbling together desperate measures to prevent wholesale collapse.
A Week of Deepening Financial Crisis

Two of the four largest independent investment banks in the U.S. ceased to exist last week. In a matter of hours, Lehman Brothers went bankrupt, while Merrill Lynch was forced into liquidation and then absorbed by Bank of America. This follows the government-promoted buyout in April of Bear Stearns, another giant investment banking firm that was on the ropes, by JPMorgan Chase.

It was only several weeks ago that the U.S. government had taken over the two major and failing mortgage-finance giants—Fannie Mae and Freddie Mac. At the time, this takeover was presented as providing an effective firewall against future financial eruptions. But it proved to be no more than the patching up of a pothole during an earthquake. This past week the government had to take over the American International Group (AIG), the giant insurance-financial firm.

At the start of last week, AIG had over a trillion dollars in assets. It had earned enormous profits from insuring mortgage-backed investments circulating in the financial system that were held by other banks. But this has turned into a disaster. Here is some of what happened:

Through deceit and aggressive marketing, banks pushed mortgages on people. The Federal Reserve Bank had pumped low-cost funds into the banking system to prop up mortgage loans. These loans were then combined into larger groups of loans by investment banks (like Lehman Brothers) and turned into financial products that were sold on financial markets. All kinds of lending took place with these original loans as collateral. But when housing prices fell, and mortgages could not be paid, much of this collateral became worthless.

AIG was insuring much of this lending against the risk of loss. But as the losses mounted astronomically, AIG could neither cover the costs of backing this debt nor borrow funds on the financial markets to keep itself afloat.

The financial markets had basically lost confidence, and AIG’s assets tumbled in value. AIG was in danger of collapse. But if AIG went under, the probability was great that it would have taken down other financial institutions with it. This forced the government’s hand.

As the week progressed, the U.S. ruling class was faced with a two-fold danger: additional and cascading losses and bankruptcies in the financial sector; and the possible choking up of lending channels, which could send the economy as a whole into a rapid downward spiral.

By the end of the week, the U.S. government announced what will likely turn out to be the largest bailout operation in U.S. history. The initial cost of that bailout plan is $700 billion. This comes on top of $85 billion to rescue AIG and the plan to spend $200 billion to shore up Fannie Mae and Freddie Mac.
International Dimensions

This is a rolling financial and credit crisis. It is amplifying internationally with bursts of instability. In the midst of last week’s U.S. market gyrations, the Russian stock market sank and shut down for two days. In other parts of the world, concern spread about whether dollar-based loans in global markets would continue on the scale necessary to sustain daily business operations. In response, the central banks of Germany, Japan, England, Canada, and Switzerland pumped some $185 billion into the financial markets.

And investor worry is mounting in East Asia. China, Japan, and South Korea, for instance, count on the U.S. as a major export market.

One of the most significant features of world growth and expansion over the past decade has been the deepening integration of the world capitalist economy. This is happening both on the level of production and trade—like the parts that go into an automobile being manufactured in different factories around the world. And it is happening at the level of finance—where banks are more globally and tightly interlinked with one another through chains of borrowing and lending and even, as in the case of AIG, insuring the risks of borrowing and lending.

The rescue operation announced by the U.S. government at the end of the week was motivated, on the one hand, by the need to stanch the bleeding of the U.S. financial system; and, on the other, by the need to restore international confidence in the U.S. economy.

A particular matter of concern for U.S. rulers is the international strength of the dollar. When we think about the dollar, we mostly think about it in terms of buying and selling with dollars changing hands. But the dollar is also an investible commodity—major currencies are bought and sold and traded on international currency markets. The dollar rises and falls in value in relation to other currencies and in response to international political and economic developments.

The dollar is the world’s leading currency for settling transactions, clearing debts, and holding foreign exchange reserves (trade and investment earnings that become part of the reserves of foreign central banks).

The dollar has been a linchpin of U.S. global supremacy. And it is a linchpin of the whole current global economic order.

If foreign central banks and investors were to flee from dollar holdings, this could set off a global monetary crisis and/or strengthen the position of rivals to U.S. imperialism and rival currencies (like the euro in Western Europe).

The dollar has for the most part held firm over the past month. But this is perhaps the calm before the storm.
Uncharted Waters and the Needs of Empire

These are uncharted waters for imperialist policymakers. They are uncharted in terms of the scale and complexity of the crisis. They are uncharted in terms of the magnitude of the rescue operations required to prevent financial breakdown. And U.S. imperialism does not have unlimited maneuvering room.

The U.S. is already the largest debtor nation in the world. It is waging costly wars for greater empire in Iraq and Afghanistan. And neither McCain nor Obama has any serious intention of ending America’s global “war on terror”—the umbrella under which the U.S. is waging these “wars for empire.”

And here an important dialectic comes into play. “U.S. military dominance,” to quote Kenneth Rogoff, the former chief economist for the International Monetary Fund, “has been one of the linchpins of the dollar.”(Kenneth Rogoff, “America Will Need a $1,000bn Bail-Out,” Financial Times, September 17, 2008). But this military dominance and the wars the U.S. is waging have increasingly come to depend on the steady inflow of foreign capital into the U.S. economy, especially investments by foreign central banks in U.S. government debt (the U.S. Treasury sells bonds to cover the deficits). For this to continue requires that the U.S. economy and dollar remain stable. This is a major contradiction for U.S. imperialism.

When three of the five largest independent investment banks in the United States have gone bankrupt or been absorbed, when the U.S. government intervenes in the financial sector on the scale that it has—this has profound geopolitical implications.

At the same time, the world economy is not standing still. There are major shifts in global economic power. U.S. global economic dominance is declining. And U.S. imperialism is also facing new competitive challenges and the emergence of potential rival constellations of imperial and big powers (see the ongoing Revolution series “Shifts and Faultlines in the World Economy and Great Power Rivalry”).
The U.S. Ruling Class and Imperialist State Come Into View

As the crisis unfolded this past week, some of the realities of bourgeois rule came into sharper focus.

To begin with, while the jobs, homes, and futures of literally millions in this society are in jeopardy, what is the paramount concern of the ruling class? It is the protection of a financial system that sits atop a global system of exploitation. It is the bailout of the owners and investor beneficiaries of that financial system.

There was no public debate over bailouts and loans for financial institutions. And the constant refrain from on-high was, “This is no time to assign blame.” Certainly, there is never a time, from the standpoint of the bourgeoisie, to talk about capitalism and its exploitative and anarchic functioning.

Politically, the system operates in such a way that the masses of people are either conditioned to be passive bystanders, or mobilized under the wing of this or that bourgeois political party or bourgeois-led movement—or subject to repression when people engage in serious resistance.

And through the media, the politicians, and the official “experts,” people are trained to look at things through a certain ideological filter. When a crisis like this one hits, the problem is never presented as the system but rather as particular flaws and malpractices that can be corrected: “excessive greed,” “Wall Street irresponsibility,” “too much regulation” or “too little regulation.”

The truth is that this crisis has deep structural causes in the very nature and workings of this global system of exploitation (and these deeper causes are addressed in the accompanying article “Financial Meltdown and the Madness of Imperialism”).

Lenin once described bourgeois parliaments (like the U.S. Congress) as “talk shops.” This time, Congress did not even get a chance to “talk” first. It has been basically presented with an accomplished fact: a bailout program. Now the bailout will be debated around the edges, with vying bourgeois economic and political interests also being fought out.

There are key institutional mechanisms of bourgeois rule and of the imperialist state. They include the Federal Reserve Bank—which plays a decisive regulating and lubricating role in the U.S. economy and which also plays a special role in the world capitalist economy—and the Department of Treasury. Several mainstream news stories described how the head of the Federal Reserve and of the Treasury, and major Wall Street figures, met to sort out the AIG situation, to come up with a plan to deal with this phase of the crisis, and then to act on it.

As for John McCain and Barack Obama, one of whom will be the next “commander in chief of empire,” their response to the crisis has been an amalgam of the absurd, the hypocritical, and sworn allegiance to the system.

McCain early last week described the U.S. economy as having “sound fundamentals.” Then he moved to launch a rhetorical attack on “casino economies” and “greed” on Wall Street. Then he returned to his boilerplate calls for tax cuts, which will largely benefit the rich.

For his part, Obama has generally endorsed bailouts while deriding the policies of laxity and deregulation of the Bush presidency. The amnesia is striking. There was an orgy of deregulation during the Clinton years, including the repeal of regulatory legislation that laid the ground for the kind of mortgage-backed securities that became the rage on Wall Street. But then again, one of Obama’s chief economic advisers is none other than Robert Rubin, former chairman of Goldman Sachs (one of the last-standing independent investment banks) and head of the U.S. Treasury Department under Clinton.

Meanwhile, in Nevada last week, Obama declared, “Our free market is the engine of America’s great progress. It’s a market that has created a prosperity that is the envy of the world.” Tell that to the hundreds of millions around the world who are experiencing the ravages of a global food crisis. This food crisis is inextricably bound up with the operations of free markets that turn grain and rice into international commodities bought, sold, and speculated on by global investors. It is inextricably bound up with the “freedom” of U.S. agribusiness to dominate world food production and distribution. And it is inextricably bound up with so-called free-market “reforms” imposed on poor countries by the International Monetary Fund (which the U.S. also dominates).
Stepping Back

This crisis is far from over. There may be new rounds of financial upheaval. The economy is already in recession. And it could very well enter into a major slump.

And true to the workings of monopoly capitalism, investors and speculators are feverishly positioning themselves to take advantage of the market turmoil. They are unloading and grabbing up assets, angling to get a bite of the government bailouts, and shifting funds into different markets.

Whoever wins the election in November will be inheriting a battered financial system and a huge overlay of debt and bailout. This is not going to be an era of expanded social spending by government. But it will be an era of more direct government intervention in financial markets. And however U.S. capitalism tries to reconfigure itself, it will rest on more intense international exploitation, austerity, and more misery for people throughout the world and in the U.S.

For millions in U.S. society, this crisis is beginning to throw up many deep and troubling questions about the economy and this whole system. And it has the potential to throw up even deeper ones.

This is a highly fraught and rapidly unfolding situation.
Kalovski Fri, 26 Sep 2008 14:22:39 +0200 http://kalovski.blog.com/3904603/ http://kalovski.blog.com/3904603/ In the past days, the wound of the capitalist crisis was exposed. Blood was oozing. The system was put in the emergency room or the ICU. A meeting was called by representatives of the bourgeoisie, bank, party leadership both Democrat and Republicans. A tactical solution was taken. Regulate the flow of blood (money) by banning short term transactions and continue upholding the infusion of more blood. The Federal banks have taken the step to inject the need to transfuse blood. But just like the human body, the blood has to circulate with proper oxygen in order not to paralyze the body parts. It seems this is not enough. For the truth of the story is the system is failing. A whole overhaul must be taken to reverse the effects of deregulation, privatization and liberalization, a characteristic which was badly needed to cope the crisis of capital accumulation or overproduction. It is impossible though in real manner to actually reverse the system. The system is designed to continue this. The only way the bourgeoisie does for the moment is to implement stop gap to prolong the system. But time to time the body shakes and is in convolution. While the system is heading to total failure, it is up for revolutionaries to seize the opportunity. While in the US many revolutionaries have succumb to left opportunism, isolating themselves from the masses, it is up for well minded revolutionaries to follow mass line and continue broadening the movement in arousing, organizing and mobilizing them in a comprehensive manner. The situation is ripe! Workers of the world unite and take the initiative.  Broaden the anti-imperialist struggle inside the belly of the beast! Kalovski Fri, 19 Sep 2008 15:52:58 +0200 http://kalovski.blog.com/3771895/ http://kalovski.blog.com/3771895/ Repost from RCP USA publication.

In early August, a long-simmering conflict in the Caucasus region of Southwest Asia erupted into open warfare, bringing great suffering to the peoples of Georgia and South Ossetia (a small break-away province from Georgia). Thousands of Russian troops quickly poured in, escalating U.S./Russian tensions to a level not seen since the collapse of the Soviet Union.

While a fragile ceasefire was signed on August 15, the situation in Georgia remains tense and unpredictable, and international tensions are continuing to escalate and spread from Central Asia to Europe, with the U.S. strengthening anti-Russian military alliances and making ominous threats that there must be “consequences” for Russia’s actions. Meanwhile, influential neo-con William Kristol calls for “offer[ing] emergency military aid to Georgia.”

All this has revealed much about the shifting tectonic plates in world relations...and the potential for pressures to build up suddenly at unexpected points and then ripple through the entire world.

Some background

Georgia is a small but strategically important country. While it has less than 5 million people, it is located on Russia’s southern flank and occupies a key transit point for oil and natural gas moving from the rich fields of Central Asia to the imperialist heartland of Europe. Securing Georgia firmly in its camp, and building oil and gas pipelines through Georgia that bypass Russia, have been major pillars of U.S. strategy for decades.

Georgia was in the forefront of nations once oppressed by Russia who were then drawn into the U.S. orbit when the Soviet Union collapsed. Its current government, headed by U.S.-educated President Mikheil Saakashvilli, is slavishly pro-American. The airport road in the capital of Tbilisi is named for George Bush, and Saakashvilli loudly echoes the Bush regime’s talk about spreading “democracy” and “free markets” as the solution to the world’s problems.

This has a crucial military component: Saakashvilli sent 2,000 Georgian troops to support the bloody U.S. occupation of Iraq, actually doubling its troop commitment this past year, even as other members of the U.S. coalition pulled out or cut back. In turn, the U.S. has stationed hundreds of military advisors in Georgia. About 12,000 Georgian soldiers—more than a fourth of their total military—have received advanced U.S. training. And Georgia—with U.S. backing—has been working vigorously to be admitted to NATO, which would mean that all NATO members would be committed to defend Georgia militarily in the event of future conflicts with Russia.

All this fits in with the U.S.’s global effort to ensure its domination of the whole planet for generations to come. Monopolizing energy control and transport, and hemming in and constraining potential rivals like Russia, are central to this goal, and Georgia plays a major role in both of these. Russia in turn, as an imperialist power, is trying to break out of this encirclement, reestablish its dominance of “its” part of the world, and forge economic and military alliances in other regions.

As Raymond Lotta points out in “Shifts and Faultlines of the World Economy and Great Power Rivalry,” “No potential challengers to U.S. imperialism are seeking to go toe-to-toe with the U.S. militarily, or to confront it in a major way, in this current conjuncture. But the existence of these challenges (and challengers) means that U.S. imperialism has to look more and more over its shoulder.” This is exactly what is playing out now.

What happened: the hand of the U.S. and the imperialist cynicism of the Russians

Most Americans would be shocked to know that the war broke out on August 7, one day before CNN proclaimed “Russian Troops Invade Georgia.” U.S. coverage has been pitched to present this as a “tiny democratic country being overrun by Russia—the neighborhood bully.” But the bloody handprints of the U.S. are all over this war. Condoleezza Rice had visited Georgia in July for high-level discussions with Georgian leaders, and that same month there were joint military exercises involving Georgian and 1,000 U.S. troops. All this was in the context of increasingly aggressive efforts by the U.S. to establish a missile defense system in Eastern Europe, which is clearly aimed at Russia and which Russia considers a major provocation.

While the exact facts of things are hidden in the fog of propaganda statements coming from all sides, even the U.S. now concedes that it was Georgia that made a major move, in line with Saakashvilli’s stated goal of dragging the two effectively autonomous regions (South Ossetia and Abkhazia) back under Georgian rule. (See New York Times, August 13, 2008: “After Mixed US Messages, a War Erupted in Georgia.”) On Friday, August 8, after a week of skirmishing on the Ossetian border, the Times reported that “Georgian officials said their troops had made a significant incursion into the breakaway region, South Ossetia...and had taken up positions outside the capital of the enclave, Tskhinvali.”

The New York Times reports that at the start of the “incursion,” “members of the Georgian army unit assigned to a training program under American advisers did not show up for the day’s exercises. In retrospect, American officials said, it is obvious that they had been ordered to mobilize for the mission in South Ossetia by their commanders.” It’s difficult to believe that whole units of troops being trained by the U.S. would simply “cut class” one day to go attack an ally of Russia…without U.S. approval…, or that Georgian leaders who fawn on the Bush regime would launch a war in defiance of the U.S.

After the Georgian “incursion,” Russia, under the pretext of protecting Ossetians from “atrocities,” poured thousands of troops and tanks into not only South Ossetia, but also Abkhazia (another, larger, separatist region in Georgia) and into central Georgia itself. The Georgian forces were overwhelmed and by August 12 Russia had captured the large town of Gori, 40 miles from the Georgian capital. (They have since pulled back to some extent, but even the terms of the just-signed peace treaty seem to allow for an ongoing Russian military presence in Georgia proper.)

All of this has been a nightmare for the masses of people. Thousands of Ossetians fled across the Russian border and thousands more hid in basements as Tskhinvali was shelled and under siege by Georgian forces. The Times quoted an Ossetian woman who finally came out of her basement and said that the city around her “looked like the end of the world.” Asked how she felt, she said, “I haven’t eaten in three days. I’m hungry, that’s how I feel.” And many hundreds of civilians, if not thousands, were killed in the week of fighting.

And all this was only multiplied by the Russian intervention which spread the war to Georgia, including attacks on major cities.

The major reactionary leaders involved in all this have truly done their best to break world records for hypocrisy, posing as defenders of the innocent victims of wars, of freedom, and of the right of nations to self-determination.

Bush, fresh from invasions and “regime change” in Iraq and Afghanistan, and feverishly working for the same goal in Iran, now insists that “the territorial integrity of Georgia must be respected,” and condemned Russia’s “bullying and intimidation.” Russia’s Putin, leader of a country that has not just once but twice invaded Chechnya (in the same region as Georgia) to crush its independence movement, now announces that Russia just couldn’t help itself when it saw a tiny country being invaded by a larger power! Then there is Georgian President Saakashvilli, touted in the U.S. press as a great defender of “democracy” and “freedom.” Besides being a shameless tool of America’s crimes in Iraq, Saakashvilli used riot police and military forces armed with machine guns to violently disperse protestors in Tbilisi in 2007, ransacking opposition TV stations and jailing dissident leaders.

Saakashvilli’s “democratic” credentials are perhaps best expressed in a 2004 comment cited by Human Rights Watch: “[T]hen President-elect Mikheil Saakash-villi stated: ‘I…have advised my colleague, Justice Minister Zurab Adeishvili—I want criminals both inside and outside prisons to listen to this very carefully—to use force when dealing with any attempt to stage prison riots, and to open fire, shoot to kill and destroy any criminal who attempts to cause turmoil. We will not spare bullets against these people.’ ”

On all sides the major players in this war are pursuing reactionary and imperialist interests, and this underscores again the crying need to forge another path for humanity, away from this dark past of oppressive regimes and cynical wars.

What the future holds

Things are still very much in motion. While the war went badly for U.S. forces in Georgia itself, and Russian power in Southwest Asia has likely grown greater as a result, the U.S. has moved to seize advantage in Eastern Europe. The key part of this has been signing a deal between the U.S. and Poland to place an American missile defense base on Polish territory; along with this there is a commitment that American soldiers will at least temporarily staff air defense sites in Poland “oriented towards Russia” (New York Times). Reactionary Polish leaders, with a clear eye to Georgia, told the Times that “Poland and the Poles do not want to be in alliances in which assistance comes at some point later—it is no good when assistance comes to dead people. Poland wants to be in alliances where assistance comes in the very first hours of—knock on wood—any possible conflict.”

Talks around this deal had dragged on for three years and then were suddenly concluded in the wake of the Georgian fighting. The New York Times described this as “the strongest reaction so far to Russia’s military operations in Georgia.”

The aggressive moves by the U.S., the counter-maneuvers by rival imperialists, the “wild cards” of various smaller states pursuing their interest within the general framework of U.S. domination but pushing and maneuvering both for immediate position and also looking for opportunities to “get on top” somewhere down the road…all these things are making the world a very volatile place. And a place that cries out for a powerful, liberatory revolutionary communist movement that offers the masses a chance to be something other than victims choosing to attach themselves to the schemes and machinations of one oppressor or another.


Kalovski Sat, 30 Aug 2008 15:01:57 +0200 http://kalovski.blog.com/3756943/ http://kalovski.blog.com/3756943/ I would only say that revolutionaries should seize the day. International conditions are far ripe of further carrying on the political task of arousing, organizing and mobilizing the masses of people for social change. While the bourgeoisie in the US is busying themselves to cope with the crisis of capitalist production by making a face lift in the political structures, elections and alliance building and method of maintaining the course of crisis management, it still do not erase the material conditions of growing disparity of  those accessing the means, with the masses of people pushed to deep poverty. The crisis of monopoly capitalism is so deep that even the bourgeoisie attempts to lure back the masses to the political system which asks for their participation,  a game of organization and political luring. It is thus most important for revolutionaries with MLM outlook to move deep and wide in terms of influence and leadership. The anti-imperialist struggle is much more pronounced as well as opportunities to broaden the struggles of the masses in the economic and political spheres. While the revolutionary movement in the US remains to be taking left opportunist stance, it is up for well minded MLM to use its forces to broaden its united front by taking on closely social and economic issues the masses are so concerned of.  While the democrats’ promises solve domestic problems such as health, education, environment and many more, the crisis of capitalism necessitates furthering oppression and plunder. It is thus a viable option to enter into tactical alliances and even integrative organizing within given political organizations, strengthen leadership and influence so we can always be in command. Kalovski Thu, 28 Aug 2008 22:08:46 +0200 http://kalovski.blog.com/3357536/ http://kalovski.blog.com/3357536/  by Raymond Lotta

This is the second in a series of articles about major transformations taking place in the world imperialist system.

Part 1 of this series discussed how the balance of international economic power is shifting among the major imperialist powers and how new geoeconomic blocs of countries are taking shape. The potential is growing for various powers, or alliances of powers, to gain greater geopolitical capacity to challenge U.S. dominance—not necessarily through direct confrontation in this period but nonetheless in increasingly strategic ways. These developments are interacting with other contradictions, conflicts, and struggles in the world.

The U.S. still occupies the primary position in the imperialist world economy. It is the largest economy; the financial glue of the whole world system; and the political-military “guarantor” of a global order that benefits, at least for now, all the big powers.

The U.S.’s economic position in the world has been declining. But U.S. imperialism possesses unparalleled military strength relative to rivals and would-be rivals. And since 2001, it has been pressing this advantage—mounting a global military offensive, focused in Iraq and Afghanistan, to secure unchallengeable dominance for decades to come.

But the United States is encountering difficulties in pursuing its global agenda. Its financial system has been experiencing growing turmoil. The shifts and changes in world economics are impacting U.S. imperialism’s freedom of maneuver.

In short, the imperialist system is in flux. And China is a highly dynamic element in the equation.

The nature of China’s development, and the implications of China’s rise in the world imperialist system, is the topic of this article.

I. INTRODUCTION: NOT A SOCIALIST SOCIETY, A COMPLEX DYNAMIC OF DEVELOPMENT

Many people assume that China is a socialist society—after all, its leaders describe their system as socialist and there is, in name, a ruling communist party. But socialism no longer exists in China. It was overthrown in October 1976. Deng Xiaoping and other leading neo-capitalist forces within the Chinese Communist Party carried out a military coup soon after Mao Tsetung died. These forces moved quickly to arrest the Maoist leadership core and to suppress revolutionary opposition.

Glossary:

Accumulation of capital. The production of surplus value (the source of profit) based on the exploitation of wage labor; and the investment and reinvestment of profit by competing capitals on an expanding, cost-cheapening, and technologically more advanced (and productive) basis. This is a process, as Marx said, of the accumulation of wealth at one pole and misery and agony of toil at the other.

Capital export. The outward flow of investment capital from one country to another. Capital export consists of foreign direct investment in an existing enterprise of the host country or the building of new facilities (as when GM opens a factory in China), and other forms, such as bank loans, investments in stocks and bonds, etc.

Imperialism. The stage of development of capitalism as a world system of exploitation reached in the late 1800s. We live in the age of imperialism. Imperialism involves five key features: a) the dominance of monopoly (large, highly centralized, and powerful units of ownership and control) over the organization of production and distribution; b) the merging of banking and industrial capital into huge financial blocs; c) the central importance of the export of capital to overall profitability; d) the economic division of the world by large corporations, cartels, and the great powers into spheres of influence; and e) the complete territorial division of the world by the imperialist powers into colonies, neocolonies, and zones of influence, so that struggle between the leading imperialist powers will involve the re-division of the world.

The bourgeoisie. The ruling class of capitalist society. This modern exploiting class commands private control (ownership) over large-scale, highly developed, social productive forces—workable only by the collective efforts of a class, the proletariat which, dispossessed of means of production, must sell its labor power in order to survive. The bourgeoisie embodies the capitalist imperative to expand or die. It stands in antagonistic relation to the proletariat. It enforces its rule over society through control of the state and its organs of repression and force.

A new capitalist class rules China. It is subordinate to and dominated by imperialism. Indeed, imperialism has deeply penetrated Chinese society and economy: through investments by transnational corporations…through the activities of global finance…through the influence of imperialist-controlled institutions like the World Bank and World Trade Organization…and through channels of culture and ideology.

China is dependent on imperialism: on massive inflows of investment capital into the Chinese economy; and on access to the export markets of the advanced capitalist countries, like the U.S., Japan, and Germany. This is what has been and what is now most determining of China’s capitalist development.

At the same time, precisely because China has been such a profitable arena for imperialist investment—based on its vast supply of super-exploitable labor, which is China’s “competitive advantage” in the world system—China’s economy has been growing rapidly. As this has continued, and as China’s rulers have acted to strengthen their base of power and initiative, China has gained increasing influence and leverage. This is occurring in a framework in which imperialism, particularly U.S. imperialism, dominates China.

China’s rulers are, increasingly, seeking to carve out space and pursue their own geostrategic interests within this framework and on the same underlying basis: the savage exploitation of wage labor. But in pursuing their interests, China’s capitalist rulers are presenting challenges to a framework that has largely benefited U.S. imperialism.

China may in fact be in transition to becoming an imperialist power. But whether it does, or does not, will not just be a function of economic factors, and certainly not simply those internal to China. Rather, this will turn on different and interpenetrating economic, political, and military developments in the world system, including unexpected developments: crises, wars, class struggles in China and the world, and revolutions.

Overall, a complex dynamic of dependency and growing strength is shaping China’s development and rise in the world imperialist system—and reacting back on this system. How this plays out is not predetermined. But it is already a major and defining faultline in the world.  

II. CHINA’S RAPID GROWTH: DRIVEN BY FOREIGN CAPITAL, EXPORT-DEPENDENT

China is now the world’s second-largest economy after the United States. China’s rate of growth has been the fastest among all major economies in the world, averaging close to 10 percent growth in Gross Domestic Product (GDP) over the last two decades. By contrast the imperialist countries’ average annual growth rate was 2-4 percent. China’s GDP, its output of goods and services, doubled between 1990 and 2005. China, however, remains a poor country, with output (and income) per person far below that of the advanced capitalist countries.

China’s exceptionally high and sustained rate of growth and industrialization over the last two decades may well be without precedent in the history of capitalism. More to the point, this sustained growth is a) leading to an enormous buildup of productive capacity in China; b) profoundly influencing the trajectory of global capitalist development; and c) contributing to China’s rapid rise as a world economic power.

A. China in the World Economy

China is becoming the center of gravity of world manufacturing. In recent years, China has been among the top five major destinations for foreign investment, and it is the main destination for foreign industrial investment in the world. China has been a growth engine for the imperialist world economy. China consumes some 20 to 25 percent of the global supply of iron, steel, aluminum, and copper. China accounts for one-third of the world’s rise in demand for oil.[1]

China is deeply involved in the world economy. It is the world’s largest non-U.S. holder of dollars. It is engaged in competitive struggles for raw materials and energy resources in Africa and elsewhere with the U.S. (and other imperialist powers). China is emerging as a growing and increasingly assertive geoeconomic force in the world. And U.S. imperialism, for its part, has been increasingly targeting China as a potential long-term competitor and adversary.

China’s rapid growth is inextricably bound up with huge inflows of foreign investment capital:

* Foreign capital controls the majority of assets of 21 of China’s 28 leading industrial sectors.[2]
* By the early 2000s, transnational corporations, like General Electric, accounted for over one-third of China’s industrial output.[3]
* Enterprises in which foreign capital is invested account for almost 60 percent of China’s imports and exports.[4]

Investment by foreign capital in China has spawned the development of vast new production complexes in China’s coastal areas, where 80 percent of all foreign investment goes. And in the last twenty years, some 200 million rural laborers have relocated to the urban areas to find work.[5] This super-exploitable army of migrant labor, facing low pay in work and discrimination in housing and services, feeds the labor requirements of these production complexes.

Foreign capital in China is heavily invested in low-cost, low-value manufactured goods, like garments. China is also producing electronics and information technology (IT) goods—and is now the biggest exporter to the U.S. of computers, computer electronics, and other IT goods. But a high proportion of those exports involve assembly in foreign-owned plants in China or operations contracted to local Chinese capitalists of high-tech components manufactured outside of China.[6] This is an example of China’s distorted development.

China is the largest recipient of direct foreign investment in the Third World. And overseas firms derive exceptionally high profits from their operations in China. As Chart 1 shows, rates of return on U.S. manufacturing investments in China are twice the level of comparable investments in the European Union (EU) countries, and higher than in Latin America.

Another example of imperialist-led development: when imperialist capital contracts out to Chinese firms, the flow of profits is disproportionately towards imperialism. Take an iPod sold in the United States for $299. Only $4 stays in China with the firms that assemble the devices, while $160 goes to American companies that design, transport, and retail the iPods.[7]

International capital has molded China’s economy into, and integrated it as, a key link in an East Asian regional system of high-profit, export-oriented production.

China relies heavily on the U.S. market, which is its top export destination. Thus China’s economic vitality hinges crucially on growth of demand in the U.S. market, demand that is increasingly financed by debt. China is also dependent on export markets in another way: it must exponentially expand exports to pay for its rising bill for imports of energy, minerals, food, semifinished goods, capital goods (like machinery), and luxury goods catering to its new affluent classes.

B. Some Historical Perspective and the Crimes of China’s New Capitalist Rulers

In the 19th century, Western capitalism came to dominate China—through wars, the imposition of unequal treaties, and the splicing up of China into foreign spheres of influence. The economic and military penetration by foreign powers brutally continued: the U.S.’s economic pressure to “open up” the Chinese market, Japanese aggression and occupation in the 1930s, and U.S backing of the corrupt and reactionary Chiang Kai-shek forces in China’s civil war of 1945-49. China had lost its sovereignty, and economic development in China was twisted and stunted by imperialist domination.

The Chinese revolution of 1949-76 changed all of this. It broke the vise-grip of foreign control. It destroyed the foundations of exploitative and corrupt landlord and bureaucrat-capitalist rule. China’s resources now served the needs of all-around development. Under Mao’s leadership, China constructed a self-reliant and balanced economy. A modern industrial base was built. Transport and power stations, part of a new infrastructure created by the collective efforts of society, served this balanced development. Industry was spread to towns and villages. Communes were established in the countryside: farming was carried out cooperatively at different levels, peasants joined together to construct vast irrigation and flood control systems, health services and education were provided at low cost. A skilled and healthy labor force was the result.

After overthrowing socialism in 1976, China’s new capitalist rulers basically opened China up and delivered it over to foreign capital. Imperialism, together with the new capitalist rulers in China, plugged into and transformed China’s past socialist development to serve the accumulation of capital. The new regime stripped workers of rights and turned them into wage slaves for foreign and new domestic capital. They dismantled the communes; and peasants dispossessed of land or unable to support themselves in agriculture migrated out of desperation (and the lure of higher incomes) to the cities in the booming coastal regions to become a caste of flexible, super-exploitable, and disposable workers. The infrastructure built up during the socialist period functioned as a kind of subsidy for imperialist-led development.

C. China’s Bourgeoisie and the State Sector

A state-based section of the ruling class is at the core of power in China and rules through its political instrumentality, the Chinese Communist Party—which has nothing in common with socialism or communism. This core fraction of the Chinese bourgeoisie has control over key levers of the Chinese economy. It regulates monetary and tax policy. It is closely linked to and dependent on foreign capital, and it is integrated with large domestic private capital. And it commands the military and repressive force of state power—and uses this power brutally against the masses, as we saw in the suppression of students and workers during the Tiananmen Square upheaval of 1989.

The state economic sector includes government-owned industrial enterprises and banks, and accounts for about 35 percent of China’s economy. The private capitalist sector of the economy is growing much more rapidly—and much of the state sector has been privatized. Since 1995, China’s state sector has undergone considerable restructuring. It has shed a vast number of firms and tens of millions of employees. But a core of state enterprises dominates much of heavy industry and key service sectors.[8] And the state sector remains an economic base of power of this leading fraction of China’s bourgeoisie.

State control remains very strong in the banking and insurance sectors, even as they have sold shares to private international investors.

Within the framework of imperialist domination and dependency on imported technology, the Chinese state has, to some degree, been strategically steering China’s development. One of its goals is for China to “move up” the manufacturing ladder to more sophisticated production. China is producing more capital-intensive goods, engaging in more modular (technologically advanced, standardized) manufacturing, and so forth.

China’s ruling class is attempting to expand and diversify China’s industrial-technological base and to influence patterns of development.

An auto industry, spearheaded by foreign capital (companies like Volkswagen and General Motors), is now rapidly developing in China. But as a condition of entry into the China market, the Chinese government is requiring unprecedented technology transfers from transnational corporations. The regime has insisted that its domestic automotive makers maintain joint ventures with its competing foreign partners.

Very importantly, China is investing in large-scale and long-term research and development. And the government is promoting national private and state companies to be national frontrunners in industries like computers and telecommunications.

China’s rulers are seeking to turn imperialist, foreign-dominated development into a base to fortify China’s position as a world economic power and from which to project and amplify that power on a world scale.

Still, China’s high-speed development as it has unfolded remains dominated by foreign capital and reliant on international markets. It is vulnerable to fluctuations in world market demand. It must attract foreign capital—which is constantly looking for even more low-cost zones of production—from Mexico…to China…to Vietnam. This project requires and puts a premium on social and political stability in society and the economy but has, at the same time, produced extreme and acute agricultural-industrial distortions and vast regional and social inequalities. The gap in incomes between China’s urban and rural areas is, by some statistical reckonings, greater than in any other country in the world, and this is profoundly destabilizing.[9]

D. Reality Check

Cost-minimizing, high-profit, rapid growth is a key objective of China’s ruling class. It is based on the exploitation of wage labor and peasant labor—on the blood and bones of the Chinese people. It is chaotic, ruinous, and environmentally disastrous economic development.  

Five of the ten most polluted cities in the world are in China. The Three Gorges Dam project, the scale of which is unparalleled in human history, has massively destroyed ecosystems and uprooted huge populations. Ravenous commercial development is destroying farmland at a quickening pace (farmers are pressured by local government officials to sell their land-use rights and are barely compensated). China has now lost half of its wetlands. Capitalist development is an ecological disaster. It has been estimated that air pollution, water pollution, and other forms of environmental degradation are responsible for disease and premature deaths claiming the lives of some 400,000 people in China each year.[10]

China’s economic development is a human disaster:
The Sichuan earthquake in the spring of 2008 took a far greater toll among China’s poor: shoddily built schools for the less affluent collapsed and many children died unnecessarily. Peasants must pay fees for medical services and schooling. A recent survey of the Chinese health system concluded. “The less well-off increasingly go without health care altogether.”[11]

In urban China, it is not unusual for low-paid wage laborers in the export sector to work 80-hour work weeks in factories with abominable health and safety conditions. In the West, we hear about the lead paint in toys produced in China, but not about the toxic fumes being inhaled, the injuries suffered, and limbs lost by the workers in those toy factories. According to one Chinese government survey, 72 percent of the country’s nearly 100 million migrant workers are owed unpaid wages—and this is an important source of capital accumulated by private and foreign firms.[12]

Significantly, China’s economic boom of 1990-2002 actually led to a decline in formal wage employment in the urban sector (that is, regular jobs with certain protections and standards), as the state sector sought to achieve greater efficiency and profitability. Much of the new job creation has been in the private sector and especially in what is called the informal sector: insecure and unregulated jobs, casual labor on the construction crews of China’s mega-projects (skyscrapers in the cities, infrastructure for the 2008 Olympics, dam construction in river areas), street trading, and illegal activities.[13]

One expression of these trends is China’s burgeoning “sex industry.” Some women’s groups estimate that China now has some 20 million sex workers, most of whom come from the rural areas to work in red-light districts in the sprawling new industrial and commercial centers.[14]

Rural women face new burdens, with husbands and sons migrating to cities. Their life opportunities are restricted. One of the saddest and least reported social developments in China’s countryside is that women—young women—are committing suicide in unprecedented numbers. This is a far cry from Maoist China, when the struggle against the oppression of women was a central focus of the continuing revolutionary transformation of society.[15]

III. China as Rising Economic Power with Strategic Goals

The rapid development of capitalism in China is cohering a China-centered regional grid of capitalist production in East Asia, in which Japanese imperialism plays a major organizing role. East Asia is the most dynamic manufacturing region in the world. China’s rulers are fostering greater economic-political linkages throughout East Asia. China is also building up its capacity to project military power in the region. And it is pushing outward into other parts of the world.

A. Growing Financial Leverage

China has become a major actor in world currency and financial markets. China holds $1.8 trillion in foreign exchange reserves—a store of wealth that is also used as a means of international payments. Foreign exchange reserves come from export earnings as well as from other investment earnings. And China is an extraordinary export machine—the United States imports more goods from China than from any other country. China has now surpassed Japan as the world’s largest holder of foreign exchange reserves. Most of these reserves (for now) are kept in dollars—invested in U.S. treasury securities, U.S. government agency debt, and other financial instruments.

China’s dollar holdings are a source of considerable financial leverage in the world imperialist economy. The U.S. has huge government deficits (it spends more on its wars, social programs, interest payments, etc. than it collects in taxes). The U.S. has huge trade deficits (it imports more than it exports). It borrows huge amounts of capital to cover its international financial imbalances. And, critically, the U.S. depends on countries like China continuing to finance its debt.

In 2007-08, China’s “sovereign wealth funds”—these are vast pools of financial wealth managed by governments—were looked to by weakened Wall Street financial and brokerage firms, like Morgan Stanley, to provide them with much needed capital.

China is a huge importer of fuels and minerals, accounting for nearly 40 percent of world market growth for these goods since 1995. Because of China’s high-speed and globally oriented development on a less-developed technological foundation than exists in a country like Japan—China uses seven times as much energy for the same volume of production as does Japan (and three times as much as India).[16]

And China is seeking to secure access to raw materials to feed its industrial machine. In Latin America and Africa, China is investing in extractive industries and buying up firms. China’s foreign direct investment increased from $1.8 billion in 2003 to $16.1 billion in 2006. About half of this is in natural resource industries.[17]

A competitive scramble is beginning to take shape in Africa for control over oil and mineral supplies. U.S. oil companies have been stepping up their investments in countries like Angola, Nigeria, and Equatorial Guinea. In 2007, the U.S. military also established a new unified Africa Command, AFRICOM. (Prior to this, military deployments were coordinated by commands outside of Africa.) This is a major initiative by U.S. imperialism both to secure oil supplies and control over other natural resources and to incorporate more parts of Africa in America’s “war on terror.” As part of this, the U.S. has been stepping up arms transfers and military support agreements with various African governments.

Since the mid-1990s, China has been stepping up its activities in Africa. China is now Africa’s third largest trading partner. China’s state-owned oil company acquired a controlling share in Sudan’s leading oil company. It has become an investor in Algeria’s oil industry. And it has been making its own investment forays into the oil sectors of Angola and Nigeria. Africa now provides about 30 percent of China’s oil import requirements. Chinese mining firms in search of cobalt, uranium, copper, and other industrial minerals, supported by the Chinese state, have been investing in, extending financial assistance, and forging closer ties with the Democratic Republic of Congo, Zimbabwe, and Zambia.[18]

All this investment and maneuvering on China’s part is miniscule compared to the involvement of the U.S. and Europe in Africa. But there is intensifying rivalry in Africa, and a scramble increasingly involving China is underway.

China is utilizing political and diplomatic ties, weapons sales and training agreements, and low-interest loans to advance its interests. It is ideologically positioning itself in parts of the Third World by criticizing U.S. domination and some of the U.S. policies that squeeze Third World countries. And it is taking advantage of the fact that the U.S. is focused and tied down in the Middle East, where its wars for greater empire are now being waged.

U.S. imperialism has been increasingly targeting China as a strategic competitor. Since 2006, the U.S. Defense Department in its annual survey of China has put competition with China over resources on par with conflict over Taiwan as a potential spark for a U.S. war with China.[19]

It is in the context of China’s rise in the world economy and rivalry with China that we can begin to see U.S. demonization and scapegoating of China: for exporting unsafe foods and medicines, for intellectual property-rights infringements, for human rights violations, and for increasing its military spending.

B. Geopolitical Ambitions and the Russia-China Connection

China’s fast-paced, resource-scarce, and anarchic economic growth, under the dominance of imperialist capital, is objectively driving its emergence as a world power with geopolitical ambitions.

China’s military spending has increased three-fold in the past decade according to estimates by the Stockholm International Peace Research Institute. In 2006, it surpassed Japan as the largest military spender in East Asia, and China now has the third largest military budget in the world.[20] China has been upgrading its naval capabilities, improving its ballistic missile arsenals, and entering high-tech arenas like militarization of space. China’s military spending is incredibly dwarfed by that of U.S. imperialism, but China’s military power is a growing factor in international relations, especially in East Asia.

Coming from a perspective of how to advance the interests of U.S. imperialism, two former U.S. government policy advisers reflect a certain aspect of reality in their depiction of the changing geopolitical situation confronting the United States in this critical region: “After 60 years of U.S. domination, the balance of power in Northeast Asia is shifting. The United States is in relative decline, China is on the rise, and Japan and South Korea are in flux. To maintain U.S. power in the region, Washington must identify the trends shaping this transition and embrace new tools and regimes that broaden the United States’ power base.”[21]

One of the features of the current situation is the growing convergence of interests of China and Russia in key arenas and the multiplication of Sino-Russian ties and cooperation. In 2006, China became the number one economic partner of Russia, and China has also been financing important Russian pipeline projects—which will be discussed in the next installment of this series.

Both China and Russia are providing arms to oil and gas producers in the Third World. Both are increasing their military capability in key energy producing regions. And both powers joined together in 2001 to form the Shanghai Cooperation Organization of Central Asian countries.

The Shanghai Cooperation Organization (SCO) is a major development in world relations. China’s economic growth and rise in the world economy are increasingly finding expression in the geopolitical and military realms. The SCO is a regional energy alliance and a regional security alliance in Central Asia. Its core member states are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.

The SCO is bringing together Chinese economic strength with Russian military capability and energy resources. In the summer of 2007, the SCO conducted its first military exercises. This was also the first time that Chinese airborne troops were deployed outside Chinese territory.[22]

The SCO is clearly aimed at reducing and countering U.S. influence in Central Asia and at concentrating certain strengths, and overcoming certain weaknesses, of Russia and China—and drawing others around them. This is a fledgling but significant vehicle of rivalry in a volatile, energy-rich region of the world.

C. Some New Questions

Some new questions are posed by China’s rapid ascent in the world economy.

Could China “decouple” (the phrase is used by financial as well as by geopolitical analysts) from its reliance on the U.S. export market and abandon its willingness to finance U.S. deficits?

In the short run, the answer seems to be a resounding no—given the huge shocks this could set off (China would stand to lose billions if it quickly bolted the dollar and caused the value of the dollar to plummet) and the fact that China’s dependent and distorted development requires export markets on a huge scale. It appears that China cannot easily switch to stimulating domestic demand as a substitute for Western export markets.

In the intermediate and longer term, the possibilities for “decoupling” look rather different, especially in connection with other world economic and geopolitical shifts.

China’s high rate of growth and the profitability it has afforded imperialist capital have been a vital stimulus to the world economy, including U.S. imperialism. At the same time, a more cohesive and competitive West European economic bloc, the European Union, is now playing a more major role in the world economy and world finance.

Still, as mentioned at the start of this analysis, the U.S. occupies the primary position in the imperialist world economy. And owing to China’s deep immersion in the imperialist world economy, if it suffers the full brunt of what might be an unfolding global economic downturn this could have huge and destabilizing feedback effects, both on China and on the world economy. How China and the U.S. respond to and come out of the 2008 financial crisis may have long-term, geopolitical ramifications.

China has been able to sustain high growth rates. But it is a capitalist economy. It is not immune to instability and crisis. It is estimated that 75 percent of China’s industries are plagued by overcapacity, that is, too much investment relative to markets.[23] Inflation is heating up in China. Social polarization is widening: strikes, protests and confrontations in the countryside over corruption, land takeovers, and environmental damage have multiplied in recent years.

The dynamics of China’s rise are complex. There is, however, a shaping contradiction: dependency and growing economic strength. China is dependent on foreign capital and foreign markets. But China has also emerged as a world economic power, a center of world manufacturing. It has accumulated vast foreign exchange reserves, and gained considerable financial leverage—increasingly over the dollar. And China is more aggressively seeking markets in the Third World and exporting capital beyond its borders.

Stepping back, what seems to be guiding the Chinese ruling class is a long-term, strategic, and competitive orientation: to diversify and fortify a domestically rooted industrial base, to extend international economic and financial reach, and to strengthen military capabilities but to do so without provoking direct showdowns with U.S. imperialism.

Could China evolve into an imperialist capital formation? It is a question that cannot be dismissed out of hand, though neither is it a straight-line, foregone conclusion. But it is a real possibility—China may be in a stage of transition to becoming an imperialist power. How likely is such a qualitative development, and by what pathways might it proceed? These are historically contingent matters that will turn on the interaction of the motion and development of Chinese capitalism; with the class struggle in China; with larger shifts, displacements, and eruptions in world economics…and with big and unexpected developments in world politics, including wars and other conflicts, as well as revolutionary struggles.

Next, Part 3: The European Union, Russia, Japan, and India

Footnotes:

1. Keith Bradsher, “Labor Costs Soar in China, So Its Neighbors Beckon,” New York Times, June 18, 2008; John C.K. Daly, “Feeding the Dragon: China’s Quest for African Minerals,” China Brief, January 31, 2008, jamestown.org; Energy Information Administration, Country Analysis Briefs: China, August 2006, eia.doe.gov.[back]

2. Wu Qi, “China Regulates Foreign Mergers for More Investment,” September 11, 2006, china-embassy.org.[back]

3. Wang Zile, “Foreign Acquisition in China: Threat or Security,” China Security, Vol. 3, No. 2 (Spring 2007), p. 90.[back]

4. U.S.-China Business Council, Forecast 2008: Foreign Investment in China, p. 1.[back]

5. U.S.-China Business Council, Forecast 2008: Foreign Investment in China, p. 3; CIA, World Fact Book: China, cia.gov.[back]

6. Nicholas Lardy, “Trade Liberalization and Its Role in China’s Economic Growth,” imf.org.[back]

7. Charlemagne, “Winners and losers,” The Economist, March 1, 2008, p. 56.[back]

8. On the state sector, see Arthur Kroeber and Roselea Yao, “Large and in charge,” Financial Times, FT.com, July 14, 2008.[back]

9. Mobo Gao, The Battle For China’s Past: Mao and the Cultural Revolution (London: Pluto, 2008), pp. 160, 179; Joseph Kahn and Jim Yardley, “Amid China’s Boom, No Helping Hand for Young Qingming, New York Times, August 1, 2004.[back]

10. Elizabeth Economy, “China vs. Earth,” The Nation, April 19, 2007; Jim Yardley, “China’s Turtles, Emblems of a Crisis,” New York Times, December 5, 2007; L. Alan Winters and Shahid Yusuf, eds., Dancing with Giants (Washington D.C.: World Bank, 2007), p. 14.[back]

11. Li Onesto, “The Capitalist Ground Shaken by the Earthquake in China,” Revolution #131, June 1, 2008, revcom.us; Sanjay Reddy, “Death in China: Market Reforms and Health,” New Left Review 45, May-June 2007.[back]

12. Anita Chan, “A `Race to the Bottom,’” China Perspectives, no. 46 (March-April 2003), p. 43; David Harvey, A Brief History of Neoliberalism (London: Oxford University Press, 2005), p. 148.[back]

13. Martin Hart-Landsberg and Paul Burkett “China, Capitalist Accumulation, and Labor,” Monthly Review, May 2007, pp. 28-29.[back]

14. Howard W. French, “The Sex Industry is Everywhere But Nowhere,” New York Times, December 14, 2006, cited in Hart-Landsberg and Burkett, p. 29. [back]

15. Robert Weil, “Were Revolutions in China Necessary,” Socialism and Democracy, Vol. 21, July 2007, pp. 20-22.[back]

16. Winters and Yusuf, Dancing with Giants, p. 14; Parag Khanna, The Second World: Empires and Influence in the New Global Order, New York: Random House, 2008, p. 313fn.[back]

17. PPI, “Chinese Direct Investment Abroad Has Grown Twenty-Fold Since 2000,” October 21, 2007, ppionline.org. [back]

18. On great power competition for resources in Africa and China’s growing economic presence in Africa, see Michael T. Klare, Rising Powers, Shrinking Planet (New York: Metropolitan Books, 2008), Chapter 6; Jian-Ye Wang and Abdoulaye Bio-Tchane, “Africa’s Burgeoning Ties with China,” Finance and Development (IMF), March 2008, Vol. 45, No. 1; David H. Shinn, “Africa, China, The United States, and Oil,” Africa Policy Forum, forums.csis.org. [back]

19. Michael T. Klare, “The New Geopolitics of Energy,” The Nation, May 1, 2008, thenation.com.[back]

20. Stockholm International Peace Research Institute, Recent trends in military expenditure (Stockholm: 2008), sipri.org. [back]

21. Jason T. Shaplen and James Laney, “Washington’s Eastern Sunset: The Decline of U.S. Power in Northeast Asia,” Foreign Affairs, November-December 2007, online edition, summary, p. 1, foreignaffairs.org. [back]

22. On the Shanghai Cooperation Organization, see Bates Gill and Mathew Oresman, “China’s New Journey to the West” (Washington, D.C.: Center for Strategic and International Studies, 2003), pp. 5-12; See also, Klare, “New Geopolitics of Energy.” [back]

23. Review of International Political Economy, 15:2, May 2008, p. 159.[back] Kalovski Tue, 22 Jul 2008 01:37:02 +0200 http://kalovski.blog.com/3289072/ http://kalovski.blog.com/3289072/ Reprint from E. San Juan Jr's article on the Philippines - K.I.

by E. San Juan, Jr.

A historic event worthy of the Guinness Book may have occurred in Washington in the last week of June.  The worst "torture" president that the United States has ever had met the most corrupt and brutal president ever inflicted on the Filipino people.  Grotesque or farcical?  Bush is now credited with the horrendous deaths of nearly a million Iraqis, over four thousand American soldiers, the cruelties of Abu Ghraib and Guantanamo, and a severe economic recession.  Arroyo claims the distinction of having scored several thousand victims of paramilitary violence (903 extra-judicial killings and193 enforced disappearances, according to the Philippine human-rights monitor KARAPATAN), open bribery of officials by raiding the public treasury,  unscrupulous cheating in elections, and untold kickbacks from government transactions (such as the ZTE Broadband scandal, among many) -- all with impunity.

Scourge of Human Rights

International groups, from Amnesty International and the World Council of Churches to the Inter-Parliamentary Union and the International Association of People's Lawyers, have all concurred on the outrageous truth of the "killing fields" in the US neocolony.  An editorial of The Philippine Star (6 June 2007) noted that the country is one of the "least peaceful countries in the world, ranking 100th among 121 in the first-ever Global Peace Index drawn up by the Economic Intelligence Unit."  United Nations Special Rapporteur Philip Alston reported to the 8th session of the UN Human Rights Council that Arroyo's "state security forces have been involved in many of the killings of left-wing activists, indigenous leaders, trade union and farm leaders and civil society organization members and that the military remains in a 'state of denial' over these killings" (see E. San Juan, US Imperialism and Revolution in the Philippines, New York, 2007).  "Not a single soldier has been convicted," Alston added, urging the Arroyo regime to end the Armed Forces of the Philippines (AFP) policy of "systematically hunting down the leaders of [legal and open] leftist organizations" such as BAYAN MUNA and assassinating their members (see the Web site of UN Human Rights Council).

The Arroyo regime recently defied the UN's Universal Periodic Review session by rejecting the recommendation to strengthen the Witness Protection Program and approve the International Convention on the Protection of All Persons from Enforced Disappearances.   In its comprehensive survey "Scared Silent: Impunity for Extrajudicial Killings in the Philippines,"   Human Rights Watch observed that in spite of public-relation ploys such as the Melo Commission and Arroyo's refrain that there is "no state policy of killing people," not one case has been solved, not a single military officer or soldier prosecuted for the murders and disappearances of activists such as Jonas Burgos, Luisa Posa Dominado, Shirley Cadapan, Karen Empeno, and thousands more (Inquirer.net. 5 October 2007).

Last year the Permanent People's Tribunal concluded its meticulous appraisal of massive evidence with the judgment that the Arroyo regime and its sponsor, the Bush administration, were guilty of "gross and systematic violation of human rights, economic plunder and transgression of the Filipino people's sovereignty."  The first session of the Tribunal on the Philippines in 1980 unequivocally condemned "the dominant economic and political role of the US in the Philippines and in the region through the implementation of an imperial policy" (PPT Verdict 2007).  Arroyo's ritual obeisance to Washington may be cited as one more proof, falling in line with a tradition of subservience of the Filipino oligarchy since the time of Commonwealth president Manuel Quezon to the first president of the 1946 Philippine Republic Manuel Roxas up to presidents Ramon Magsaysay (sponsored by the CIA) and Diosdado Macapagal (Arroyo's father) to the notorious Marcos dictatorship and its unconscionable successors.  No wonder both McCain and Obama parroted worn-out clichés about "Asia's first democracy," the Philippines as a faithful client regime during the Cold War and the current crusade against terrorists personified by politically informed combatants of the Moro Islamic Liberation Front and  the New People's Army.

Subaltern Medicancy Forever

Winding down as a tiresome fiasco and farcical boondoggle, Arroyo's roadshow to the Empire's heartland this June may have been cursed by the sinking of the Philippine ferry MV Princess of the Stars and the ravages of the deadly typhoon Frank.  Thousands of victims and their families await her sycophantic pilgrimage with cries of help and anger.  After wasting at least $1.5 million of public funds and getting a promised aid of $100,000 from State Dept. bureaucrat John Negroponte, infamous for organizing mass carnage in Central America, the Arroyo entourage is returning a the feckless attempt at fanfare.  One episode of de facto president Arroyo's visit strikes this writer as particularly telling.  George W. Bush surpassed his father's "I-love-your-democracy" apologia for the despot Marcos when he praised "the great talent" of "Philippine-Americans" whenever he dines at the White House -- a nod to Filipina chef Chris Comerford.  Arroyo's pathetic "thank you" sums up over a century of gruesomely asymmetrical "US-Philippines" relations so beloved by US experts on the Philippines and their Filipino acolytes.  Sadly hilarious but also infuriating to those out in Manila streets demonstrating against the brutality and injustice of Arroyo-US neoliberal privatization program.

Meanwhile, we learn that on June 17, retired Maj. General Antonio Taguba (not one of Bush's talented 'Philippine Americans"), in his testimony to the US Senate Armed Services Committee, accused Bush and his henchmen of committing war crimes by authorizing the use of harsh interrogation techniques.  Taguba headed the committee that investigated the abuses at Abu Ghraib prison in Iraq.  Subsequent inquiries by the American Civil Liberties Union and other groups have revealed the scale and depth of the current administration's violation of the US Constitution's Bill of Rights and the Geneva Convention on the treatment of what the US calls "unlawful" enemy combatants, otherwise considered political prisoners.

Arroyo's trip was ostensibly made to lobby for the passage of the Veterans Equity Bill -- Senate Bill 1315, approved by the Senate but pending at the House.  This bill would set aside $350 million (out of $1 billion) for ten years to pay for the basic needs of thousands of Filipino veterans of World War II, most of whom are now dead, who were denied their rightful veterans' back pay.  Without Arroyo's help, local organizers (such as the National Federation of Filipino American Associations) have mobilized enough support for the passage of the bill in the Senate.  So Arroyo's opportunistic appearance in Washington is clearly intended to prop up her severely damaged image after Senator Barbara Boxer, chair of the US Senate sub-committee on East Asian and Pacific Affairs, and several congressmen chided her last year for her intolerable record of flagrant human-rights violations.

Just as Arroyo's early trip in August 2005 was besieged with indignant protests, likewise her visit last week was met with numerous "lightning" demonstrations by outraged Filipino-Americans decrying her insensitivity to the plight of thousands of disaster victims, and the millions suffering from the rice shortage, fuel crisis, and unemployment brought about by the short-sighted neoliberal policies of the regime.  With over half of 90 million citizens subsisting on $2 a day, the Philippines exports daily 3,000 contract workers to 186 countries around the world, getting in return $10 to $12 billon in overseas remittances, enough to pay the heavy foreign debt.  In 2007 the US Congress allocated $30 million of citizens' tax dollars for the beleaguered AFP on condition that Arroyo implements UN rapporteur's Alston's recommendations, a condition still unfulfilled in deeds up to now.  The aid rocketed by 1,111% when Bush declared the Philippines the "second front" in his war after 9/11 (IBON Media Release, 21 Sept 2006).  Between 2000 and 2003, US loans and grants to Arroyo increased by 1,176%, primarily funding for counter-terrorist schemes in addition to USAID spending for livelihood projects and infrastructure -- activities that camouflage intelligence or special police operations in communities sheltering NPA or MILF partisans.

Pentagon to the Rescue

Less to pacify Arroyo's entourage and more to threaten Myanmar's junta, China, North Korea, and other recalcitrants -- Al Qaeda supporters -- in the Asia-Pacific region, Bush ordered the deployment of the strike group led by the nuclear-armed carrier USS Ronald Reagan to the Philippines.  The alleged task of this armada of aircraft carrier, cruiser, three destroyers, and a frigate is to assist in the rescue of the survivors of the capsized MV Princess of the Stars, now being attended to by the Philippine Coast Guard.  This may be the first time in military history that a nuclear-powered carrier has been assigned to perform distribution of relief goods in a situation far smaller in scope than the cyclone disaster in Myanmar or the earthquake destruction in China.  But again, it's a war against those unruly subjects, impoverished peasants and workers, including the Moros and the Filipino communists, that justifies this illegitimate intrusion.

Senator Rodolfo Biazon questioned the utility of an aircraft carrier of that size (with 6,000 crew and numerous F-18 airplanes) designed mainly for combat and rescue of distressed airplanes.  As of this writing, the USS Ronald Reagan was moored near the coast of northwest Panay, clearly within Philippine territorial boundary (Philippine Daily Inquirer, 28 June 2008).  In addition, the US Embassy revealed that the USNS Stockham and US Navy P-3 planes are on standby to provide maritime surveillance and other security needs (Philippine Daily Inquirer, 26 June 2008).  This substantiates once more public suspicions of the sustained complicity of the US with the AFP campaigns against Moro insurgents, in particular the Moro Islamic Liberation Front  (MILF) -- including the notorious bandit-group with ties to local military and politicians, the Abu Sayyaf -- and the Communist Party-led New People's Army (NPA) guerillas active in Panay and Negros, the two islands that suffered the most from the typhoon Frank.  This intrusion of the USS Ronald Reagan is an outright violation of the Philippine Constitution and bilateral treaties with the US

A local group, PAMALAKAYA (Fishermen's Group of the Philippines), accused Arroyo of committing an impeachable crime: the Philippine Constitution expressly prohibits the entry of nuclear weapons into the country.  While Arroyo's spokesmen claimed that the USS Ronald Reagan is only "nuclear-powered," the US Embassy is silent on the presence of nuclear weapons in the possession of the task force group.  Fernando Hicap, PAMALAKAYA's chair, charged that the presence of the US naval group is intended not only "to warn and provoke the local armed resistance groups [NPA, MILF] but also to score a psywar victory against China and North Korea that Washington is capable of shifting and redeploying US troops at any given situation or time" (GMANews.TV, 26 June 2008).  At present, the US stations over 100,000 troops in Asia and the Pacific under its Pacific Command, with 80,000 troops based in Japan and Korea, and several hundreds at any one time in the Philippines.

Terms of Mutual Endearment?

How did this happen?  The peculiarity of the presence of US combat troops in the Philippines may be explained by the leech-like stranglehold of the US on the Filipino ruling class and its military/paramilitary establishment.  A series of unequal bilateral treaties sealed this toxic partnership.  Obama correctly pointed to the 1954 Manila Pact that "formed a cornerstone of U.S policy in Southeast Asia during the Cold War."  But that was only the beginning.

The real key to US control may be found in the Military Bases Agreement of March 14 and March 21, 1947 between the two governments.  The first allowed the US extensive military facilities in the Philippines for 99 years, chief of which were Clark Air Base (130,000 acres) and Subic Naval Base which housed nuclear-armed submarines for decades until both were scrapped in 1992.  Thereafter 14,000 US troops left the Philippines.  This agreement prohibited the Philippines from granting base rights to any other country.  It put no restrictions on the use of the bases or on the types of weapons the US could store or deploy in them.  Despite minor amendments, this agreement allowed the US to use the bases as springboards for unlimited US intervention in Asia, such as the aggression in Korea, Vietnam, and lately Afghanistan and Iraq (see Civil Liberties Union, A Question of National Security, Manila 1983).  The second agreement allowed the US to provide military aid to the Philippines on the condition that a US. military advisory group be assigned to supervise the AFP and that Filipino military personnel be sent to the US for training.  It also prohibited the Philippines from accepting military aid or advisers from any other nation without the consent of Washington.  In the context of the campaign against the Huks, communist-led peasants fighting for land and justice at the time, the weapons and advisors supplied by Washington were used to suppress and kill Filipino "subversives" and preserve oppressive oligarchic rule, as well as subsidize the Marcos dictatorship and its repressive sequels.  Under the framework of the RP-US Mutual Defense Treaty of 1951, the Joint RP-US Military Advisory Group (JUSMAG) continues to this day to be one crucial agency in perpetuating the reactionary, anti-people orientation of the AFP and its cognate institutions, the state security personnel of every administration up to Arroyo (see the relevant documents conveniently catalogued in Daniel Schirmer and Stephen Shalom, The Philippines Reader, Boston, 1987, including details of military aid to Marcos).  It may be added here that a JUSMAG/ CIA functionary, Col. Nick Rowe, was slain by rebel forces on April 21, 1989, while allegedly shadowing "Cuban" advisors helping the NPA in South-Central Luzon.

Although the bases were shut down in 1992, the US maintains its dominance through JUSMAG and the Philippines-US Mutual Defense Board (established in 1958), which operates as a "new bilateral defense consultative mechanism" to oversee military cooperation between the two countries.  These two mechanisms were reinforced by the Security Engagement Board (SEB) in 2006 designed to deal with nontraditional security threats such as terrorism, piracy, natural disasters (for example, the recent ferry sinking and typhoon), bird flu, and the like not falling under the 1951 Mutual Defense Treaty that calls for battling external security threats in either countries.  This was supplemented by the Mutual Logistics and Support Agreement (MLSA) signed in November 2002.

Very few know the details of this notorious MLSA.  Its salient provision is its mandating the Philippine government to supply all the logistical support and supplies needed by the Pentagon during its exercises and redeployment.  Pretty much a bargain compared to the costly Clark and Subic bases of the good old days.  Of course, the humanitarian services performed by the troops are only a pretext for the US to interfere in local civil wars in the region, labeling them "international terrorism."  This agreement with the client regime thus insures a virtually un-evictable presence of the US military as police watchdog to promote and secure US economic and geopolitical interests -- from profits in oil, energy, and mineral resources to safeguarding the Malacca Straits where 25 percent of all globally traded oil passes.

Immediately after 9/11, the US State Dept promptly labeled the NPA as terrorist organization so that Arroyo can call on US troops to help her counterinsurgency campaign, even though the Philippine Constitution (Art. II, sec. 3) prohibits foreign troops' involvement in internal security matters.  Aside from infringing on Philippine sovereignty, the SEB allows the US (to quote IBON, 26 May 2006) "to maintain a prolonged military presence in the country which suits the US military's current strategy of seeking temporary access to facilities in foreign countries that enable US forces to conduct training and exercises" rather than spending for permanent physical bases.  Moreover, the Philippines functions as an important link in the security chain of the US in the Western Pacific.  The SEB enhances the US's limited infrastructure for refueling and logistics needed in its operations in the Arabian Gulf and Western Pacific areas.  Mindanao and Sulu islands have been considered strategic locations for monitoring developments in Muslim countries such as Indonesia, Malaysia, etc. where there is a rising trend of "Islamic revivalism," of which the MILF is an instance.

There are also numerous clandestine partnerships allowed by executive "understandings" and philanthropic channels.  But it is primarily the Visiting Forces Agreement (VFA) that legitimizes unrelenting US intervention in the Philippines.  Initiated by former president Fidel Ramos under the rubric of "Acquisition and Cross-Servicing Agreement" drawn up by the Pentagon, the VFA was finally approved during the Estrada administration (Daniel B. Schirmer, Fidel Ramos: The Pentagon's Philippine Friend, 1992-1997, Cambridge, MA, 1997).

Made fully operational after September 11, 2001, the VFA makes up for the loss of Subic and Clark in a much more efficient way.  It allows the Pentagon to land anywhere in the country without entailing the cost of maintaining physical structures and insuring environmental safety.  It also has no responsibility in whatever damage it can cause by its joint exercises with the host country.  While the MLSA (renewed for another 5 years) permits the US to use the Philippines as a launching pad for wars of aggression through the pre-positioning of war material in "virtual bases," the VFA allows the unhampered entry of US troops for covert operations in the course of "Kapit-Bisig" war games and "Balikatan" joint exercises with its surrogate army, the AFP.  Sara Flounders' sharp analysis of this new Pentagon concept of "Cooperative Security Locations" -- 5,458 discrete military installations around the world -- highlights its key features: facilities with rotational US presence, containing prepositioned equipment, rapidly scalable and expandable, offering bilateral and regional training.  One virtue is the overwhelming influence gained by the US on smaller and developing nations, verified by former US Pacific commander Admiral Thomas Fargo who explained in March 2003 that "relationships built through exercises and training are 'our biggest guarantor of access in time of need'" (Sara Flounders, "Expansion of U.S. Bases Spurs Philippine Resistance," International Action Center, 29 March 2008).

The virtually permanent presence of US troops in the Philippines can be accounted for by the VFA, MSLA, and other instrumentalities enforced by a subservient government parasitic on US military aid and political sponsorship.  The Arroyo regime easily fits the bill.  Because other countries in the region (Thailand, Indonesia, Malaysia; Myanmar has rebuffed US humanitarian offers) cannot tolerate US ships or troops stationed in its territory, the US has no alternative but to support authoritarian rulers like Marcos and Arroyo if it wants to curb Al Qaeda influence, check China's expansion, and project its military might in the Asia-Pacific geopolitical sphere.  Surely, the splintered tiny Abu Sayyaf always used to rationalize US troops in the Philippines is no threat to US global hegemony.  US military basing in the Philippines can only be explained by the long-range global strategy of preserving US superpower status by preventing the rise of competitors such as China (Herbert Docena, "In the Dragon's Lair," Foreign Policy in Focus, 26 February 2008).

Carnage and Mayhem All Around

Immediately after 9/11, the Pentagon announced that it would be sending 3,000 troops to the Philippines for joint operations against the Abu Sayyaf.  Over 1,000 troops were eventually sent to participate in "Balikatan 2002" that took place in the combat areas of Basilan and Zamboanga where guerillas of the MILF were operating.  This differed from previous exercises since it was now located in war zones, with soldiers using live ammunition, with no time constraints.

In July 2002, an International Solidarity Mission conducted a thorough fact-finding mission that led to three important conclusions: "1) American soldiers were directly involved in the raiding and shooting of an unarmed civilian in his house; 2) human rights abuses are continuing unabated under the Arroyo regime and are abetted by US military forces; and 3) the US military support operations that displace and violate the rights of Moro people and other Filipinos, including women and children" (Solidarity Mission Statement, July 2002).  Because of such incidents, Sen. Aquilino Pimentel accused the regime of "treason," turning the country into a deadly laboratory for the testing of the effectiveness of US troops, tactics and weaponry against the so-called terrorists" (Ellen Nakashima, "Philippines Debates US Combat Role against Rebels," Washington Post, 23 Feb. 2003).

Another involvement of US troops in counterinsurgency plots may be cited here.  In 2004, US troops made the University of Southeastern Mindanao as their temporary camp, an area claimed by the MILF as their territory.  The US in effect converted civilians into human shields, potential collateral damage, in the event of armed confrontation between known antagonists in the region.  This was part of the annual "Balikatan" exercise, this time in Carmen, North Cotabato.  The humanitarian medical missions, distribution of toys, and building of Gawad Kalinga homes all serve as cover for US military intelligence-gathering and other tactical operations.  In 2006, the "Balikatan" exercise from February to March was the biggest, involving 5,500 US troops and 2,800 Filipinos.  This took place in the hotly contested regions of Jolo, Maimbung, Patikul and Panamao, Sulu, and North Cotabato.

A recent incident reveals how deeply entangled the US is in local counterinsurgency programs of the neocolonial state.  In the town of Ipil, Sulu, last February 4, the AFP killed eight non-combatants (women and children), including a soldier on vacation.  The widow of the slain soldier testified that she saw four US soldiers in a Navy boat.  Subsequently, General Ruben Rafael, commander of Philippine troops in Jolo, stated in an interview that "a U.S. military spy plane circling high above the seaside village provided the intelligence that led to the February 4 assault" and that "the crew of the P-3 Orion turboprop, loaded with a sophisticated array of surveillance equipment pinpointed the village as a stronghold and arms depot for the radical Islamist Au Sayyaf movement" (Paul Watson, "U.S. Role in Philippine Raid Questioned," Los Angeles Times, 9 March 2008).  This same P-3 Orion spy planes was mentioned by the US Embassy as ready to be used for the disaster relief in Panay and Negroes where the NPA guerillas are vigorously challenging AFP terrorism.  US embassy spokesperson Karen Schinnerer in Manila admitted that "an aerial reconnaissance vehicle" gathered intelligence over Sulu "at the request of Philippine forces."

Heavy saturation bombings in Barangays Buansa and Cagay, a camp of the MILF in Indanan, Sulu, were carried out for five hours on April 30.  Early last year, US troops participated in attacks on the Moro resistance fighters in this region.  Witnesses of this latest genocidal foray attested to US-supplied "smart bombs" dropped by OV-10 airplanes, slaughtering many members of the 360 families who fled the area.  Based on the research of Alexander Martin Remollino, US troops in Sulu belong to the Joint Special Operations Task-Force-Philippines that employs US Special Forces, Civil Affairs and Psychological Operations personnel "to conduct deliberate intelligence, surveillance and reconnaissance in very focused areas, and based on collection plans, to perform tasks to prepare the environment and obtain critical information requirements" (Bulatlat, 4-10 May 2008).  In lay idiom, this means clearing the area of enemy forces by spying and utilizing all weapons and logistics necessary to "neutralize" hostile elements.  Although the AFP claims that those attacks were aimed at the Abu Sayyaf  and the Jemayah Islamiyah, an Indonesian-based group, the MILF has responded by declaring that the territory involved is theirs and that no other group is allowed to operate from within the premises.

What is happening in the southern Philippines is clearly a carefully designed war to occupy and sanitize a whole region rich in natural and human resources, as well as a potential strategic base for military adventures.  The problem is that it is inhabited by Moros, aboriginal peoples, and other Filipinos resisting US imperial conquest and oligarchic despotism.  Prodded by the International Monitoring Team headed by Malaysia that helped enforce a ceasefire, the MILF and the Arroyo government were close to signing an agreement last February on wealth-sharing and ancestral domain.  But the US-Arroyo attacks have worsened the displacement of 75,000 Moro civilians -- the loss of property, farmland, and livelihood, not to speak of innocent lives -- and permitted more extra-judicial killings, illegal detentions, and torture of Moro dissenters and ordinary citizens (Sandra R. Leavitt, "Pressure Brings Continued Progress in Mindanao Peace Negotiations," Shigetsu Newsletter No. 912, 18 Feb. 2008).

Approaching the Endgame

What is the future for Arroyo's brutal authoritarian rule?  Collaborating with the torture president in the White House and his deceptive "iron fist and hand of friendship" policy, Arroyo has dug herself a grave deeper than all her corruption and ruthless political maneuverings can.  If US troops succeed in building infrastructure -- presumably better roads, schools, clinics, ports, which testifies to the failure of local governance -- will that wipe out Moro separatists, local civilians who demand jobs, dignity, social services, and a measure of communal autonomy that are due them under Philippine laws and the UN Charter?  A BBC reporter displayed her ignorance of the fraught history of US colonial domination of the Philippines -- its civic culture, social practices, and institutions -- when she reduced the whole complex fabric into a question-begging dilemma: "If Philippine government bodies could manage their resources to shelter and assist their own people, maybe all those special forces [US troops] could go home" ("US Plays Quiet Role in the Philippines," 28 March 2008).

But how can this moribund state apparatus controlled by US-loving oligarchs and their self-serving intelligentsia and bureaucrats manage to do that?  The economic crisis gripping the country seems irresolvable by Arroyo's handouts and paltry rhetoric.  The undefeatable MILF is withdrawing from peace talks with the Arroyo regime, just as the National Democratic Front (together with its "terrorist" affiliate, the NPA) has postponed negotiations unless the US-decreed stigma of "terrorist" is repudiated and extra-judicial killings halted.  Surely, ninety million Filipinos, with their long tradition of fierce insurrections, will not allow the shameless puppetry of the Arroyo regime, with her generals and kowtowing officials, to continue for another hundred years.  As a UPI Asia Online forecast puts it, the decrepit Arroyo band-wagon faces "bigger, bolder insurgency" in the years to come, despite the super-power's "humanitarian" schemes and grotesque patronage.
E. San Juan, Jr. was recently a visiting professor of English and Comparative Literature at the University of the Philippines, Diliman, Quezon City.  His recent books are In the Wake of Terror (Lexington Books) and US Imperialism and Revolution in the Philippines (Palgrave Macmillan).  He will be a fellow of the W.E.B. Du Bois Institute, Harvard University, in Spring 2009.

Kalovski Tue, 08 Jul 2008 02:33:21 +0200 http://kalovski.blog.com/3251211/ http://kalovski.blog.com/3251211/ Gloria’s visit here is none other than what we call a junket. Why? She visit the US and spend a lot of government taxes (people’s money) while many of the people in the Philippines have a hard time buying a kilo of rice. Let us talk about figures

Six months ago, Gloria Macapagal Arroyo went on a three-country European junket with an entourage of 192. This include her entire family (nine persons). She brought with her, 34 congressmen and their spouses, and 50 business cronies. By the end of 2007, Gloria Arroyo had travelled 8 countries – one every 20 days! – and spent P588.5 million. In 2006, she travelled to 13 countries and spent P398 million. In 2005, she traveled four countries and spent P154 million. This year, the cost of her travels continues to increase in million from taxpayers’ money.

Her coming here in the US indeed a junket. She is would talk to a President who is outgoing by January. She will be talking to a President that comes from a party that is outnumbered in congress, an unpopular president. Under the guise of “strengthening” US-relations it cannot be strengthened at all. She is talking to a lame duck president. She too is unpopular in the Philippines. But  as craving to spend people’s money while 5,000 Filipinos go out of the country everyday to find work as domestic helpers and laborers.

By the time Barack Obama will win she will be back again here to spend more.  Here in the US she will attend a dinner organized by the US chamber of Commerce and the ASEAN-US Business Council. It will cost Arroyo $ 8,000 for a table for ten. She would spend more money as her entourage would include her lapdog  politicians, government officials, and their spouses and would love to be in the dinner table. For one table alone means 250 sacks of rice. If they have the same number of entourage  as in their European junket this means that for that dinner alone they will throw away 8,750 sacks of rice! But Gloria does not mind that. She has no inkling and no morals to think about that.

A recent report by the Commission on Audit (COA) showed that 2007 Arroyo’s foreign and domestic travels totaled P622.6 million. That’s 239% more than the all salaries of the employees in the Office of the President which would include all executive offices, agencies, commissions, and committees under her.

In addition, the COA report showed that 618.6 million was disbursed as “donations” to unknown beneficiaries. And add to that another P531.9 million for all types of expenses such as confidential expenses, consultancy expenses, extraordinary expenses, representation expenses and allowances, other personal benefits, year-end bonuses, “cash gifts”, and honoraria. The sum is a whopping P 1.8 billion. That’s a lot of sacks of rice for the people!

During the 11oth Independence Day last June 12, Arroyo cut the cost of the Independence Day program at the Rizal Park as a propaganda. She wants the people to believe that she’s willing to conserve money at a time when people were marching in the streets against rising food prices. However, on the night of June 12, Arroyo hosted a glitzy reception at the Malacanang Palace for diplomatic corps and the country’s ruling elites. In that reception in the palace she revived  the elitist dance called “rigodon de honor.” Arroyo handpicked the 20 couples – the country’s rich and famous who will participate in her Imeldific fantasies, in her rigodon.

It is interesting to note that the last time the rigodon was performed in Malacanang was on June 30, 1981. That was during the third inauguration of President Ferdinand Marcos. When Cory Aquino ascended to the presidency after Marcos was overthrown in 1987, she prohibited the rigodon from being performed in all official functions, an oblique rejection of a dance considered to be fitting on for the high and mighty ruling elite. After 27 years it is Gloria who have revived it again at a time when the economy is in shambles who’s only survival is the dollar remittances people from abroad slaving themselves, be in the Middle East as laborers, domestic helpers in Hongkong , Dubai or Brunei or in the US as care givers and nurses.

Arroyo’s junkets around the world is a personal statement of herself. This is a statement of  personal denial. She squanders billions of pesos to maintain sanity. I remember a  friends wife who goes to a shopping spree without the permission of his husband using his husband credit card when they engage in a quarrel. Of course it was a head ache when the husband receives the billing. In Gloria’s case Filipinos are silently billed by increasing prices of commodities with government taxes in it. This is really problematic in the sense that everybody will be squeezed out just like the lemon for Gloria’s morning tea!

Kalovski Wed, 25 Jun 2008 03:49:21 +0200 http://kalovski.blog.com/3193320/ http://kalovski.blog.com/3193320/ Note: Important document to understand the lessons in the international movement and socialism. -K.I.

Armando Liwanag,
Chairman, Central Committee,
Communist Party of the Philippines

January 15, 1992

Revisionism is the systematic revision of and deviation from Marxism, the basic revolutionary principles of the proletariat laid down by Marx and Engels and further developed by the series of thinkers and leaders in socialist revolution and construction. The revisionists call themselves Marxists, even claim to make an updated and creative application of it but they do so essentially to sugarcoat the bourgeois antiproletarian and anti-Marxist ideas that they propagate.

The classical revisionists who dominated the Second International in 1912 were in social-democratic parties that acted as tails to bourgeois regimes and supported the war budgets of the capitalist countries in Europe. They denied the revolutionary essence of Marxism and the necessity of proletarian dictatorship, engaged in bourgeois reformism and social pacifism and supported colonialism and modern imperialism. Lenin stood firmly against the classical revisionists, defended Marxism and led the Bolsheviks in establishing the first socialist state in 1917.

The modern revisionists were in the ruling communist parties in the Soviet Union and Eastern Europe. They systematically revised the basic principles of Marxism-Leninism by denying the continuing existence of exploiting classes and class struggle and the proletarian character of the party and the state in socialist society. And they proceeded to destroy the proletarian party and the socialist state from within. They masqueraded as communists even as they gave up Marxist-Leninist principles. They attacked Stalin in order to replace the principles of Lenin with the discredited fallacies of his social democratic opponents and claimed to make a "creative application" of Marxism-Leninism.
The total collapse of the revisionist ruling parties and regimes in Eastern Europe and the Soviet Union, has made it so much easier than before for Marxist-Leninists to sum up the emergence and development of socialism and the peaceful evolution of socialism into capitalism through modern revisionism. It is necessary to trace the entire historical trajectory and draw the correct lessons in the face of the ceaseless efforts of the detractors of Marxism-Leninism to sow ideological and political confusion within the ranks of the revolutionary movement.

Among the most common lines of attack are the following: "genuine" socialism never came into existence; if socialism ever existed, it was afflicted with or distorted by the "curse" of "Stalinism", which could never be exorcised by his anti-Stalin successors and therefore Stalin was responsible even for the anti-Stalin regimes after his death; and socialism existed up to 1989 or 1991 and was never overpowered by modern revisionism before then or that modern revisionism never existed and it was an irremediably "flawed" socialism that fell in 1989-1991.
There are, of course, continuities as well as discontinuities from the Stalin to the post-Stalin periods. But social science demands that a leader be held responsible mainly for the period of his leadership. The main responsibility of Gorbachov for his own period of leadership should not be shifted to Stalin just as that of Marcos, for example, cannot be shifted to Quezon.

It is necessary to trace the continuities between the Stalin and the post-Stalin regimes. And it is also necessary to recognize the discontinuities, especially because the post-Stalin regimes were anti-Stalin in character. In the face of the efforts of the imperialists, the revisionists and the unremoulded petty bourgeois to explain everything in anti-Stalin terms and to condemn the essential principles and the entire lot of Marxism-Leninism, there is a strong reason and necessity to recognize the sharp differences between the Stalin and post-Stalin regimes. The phenomenon of modern revisionism deserves attention, if we are to explain the blatant restoration of capitalism and bourgeois dictatorship in 1989-91.

After his death, the positive achievements of Stalin (such as the socialist construction, the defense of the Soviet Union, the high rate of growth of the Soviet economy, the social guarantees, etc.) continued for a considerable while. So were his errors continued and exaggerated by his successors up to the point of discontinuing socialism. We refer to the denial of the existence and the resurgence of the exploiting classes and class struggle in Soviet society; and the unhindered propagation of the petty-bourgeois mode of thinking and the growth of the bureaucratism of the monopoly bureaucrat bourgeoisie in command of the great mass of petty-bourgeois bureaucrats.

From the Khrushchov period through the long Brezhnev period to the Gorbachov period, the dominant revisionist idea was that the working class had achieved its historic tasks and that it was time for the Soviet leaders and experts in the state and ruling party to depart from the proletarian stand. The ghost of Stalin was blamed for bureaucratism and other ills. But in fact, the modern revisionists promoted these on their own account and in the interest of a growing bureaucratic bourgeoisie. The general run of new intelligentsia and bureaucrats was petty bourgeois-minded and provided the social base for the monopoly bureaucrat bourgeoisie.

In the face of the collapse of the revisionist ruling parties and regimes, there is in fact cause for the Party to celebrate the vindication of its Marxist-Leninist, antirevisionist line. The correctness of this line is confirmed by the total bankruptcy and collapse of the revisionist ruling parties, especially the Communist Party of the Soviet Union, the chief disseminator of modern revisionism on a world scale since 1956. It is clearly proven that the modern revisionist line means the disguised restoration of capitalism over a long period of time and ultimately leads to the undisguised restoration of capitalism and bourgeois dictatorship. The supraclass sloganeering of the petty bourgeoisie has been the sugarcoating for the antiproletarian ideas of the big bourgeoisie in the Soviet state and party.

In the Philippines, the political group that is most embarrassed, discredited and orphaned by the collapse of the revisionist ruling parties and regimes is that of the Lavas and their successors. It is certainly not the Communist Party of the Philippines, reestablished in 1968. But the imperialists, the bourgeois mass media and certain other quarters wish to confuse the situation and try to mock at and shame the Party for the disintegration of the revisionist ruling parties and regimes. They are barking at the wrong tree.

There are elements who have been hoodwinked by such catchphrases of Gorbachovite propaganda as "socialist renewal", "perestroika", "glasnost" and "new thinking" and who have refused to recognize the facts and the truth about the Gorbachovite swindle even after 1989, the year that modern revisionism started to give way to the open and blatant restoration of capitalism and bourgeois dictatorship. There are a handful of elements within the Party who continue to follow the already proven anticommunist, antisocialist and pseudodemocratic example of Gorbachov and who question and attack the vanguard role of the working class through the Party, democratic centralism, the essentials of the revolutionary movement, and the socialist future of the Philippine revolutionary movement. Their line is aimed at nothing less than the negation of the basic principles of the Party and therefore the liquidation of the Party.

I. The Party's Marxist-Leninist Stand Against Modern Revisionism

The proletarian revolutionary cadres of the Party who have continuously adhered to the Marxist-Leninist stand against modern revisionism and have closely followed the developments in the Soviet Union and Eastern Europe since the early 1960s are not surprised by the flagrant antisocialist and antidemocratic outcome of modern revisionism.

The Party should never forget that its founding proletarian revolutionary cadres had been able to work with the remnants of the old merger Party of the Communist and Socialist parties since early 1963 only for so long as there was common agreement that the resumption of the anti-imperialist and antifeudal mass struggle meant the resumption of the new-democratic revolution through revolutionary armed struggle and that the old merger party would adhere to the revolutionary essence of Marxism-Leninism and reject the Khrushchovite revisionist line of bourgeois populism and pacifism and the subsequent Khrushchovism without Khrushchov of the Brezhnev regime.

So, in April 1967 when the Lava revisionist renegades violated the common agreement and ignored the Executive Committee that had been formed in 1963, it became necessary to lay the ground for the reestablishment of the Party as a proletarian revolutionary party. Everyone can refer to the diametrically opposed proclamations of the proletarian revolutionaries and the Lava revisionist renegades which were disseminated in the Philippines and published respectively in Peking (Beijing) Review and the Prague Information Bulletin within the first week of May 1967.

The reestablishment of the Party on the theoretical foundation of Marxism-Leninism on December 26, 1968 necessarily meant the criticism and repudiation of all the subjectivist and opportunist errors of the Lava revisionist group and the modern revisionism practised and propagated by this group domestically and by one Soviet ruling clique after another internationally.

The criticism and repudiation of modern revisionism are a fundamental component of the reestablishment and rebuilding of the Party and are inscribed in the basic document of rectification, "Rectify Errors and Rebuild the Party" and the Program and Constitution of the Party. These documents have remained valid and effective. No leading organ of the CPP has ever had the power and the reason to reverse or reject the criticism and repudiation of modern revisionism by the Congress of Reestablishment in 1968.

In the late 1970s, the Party decided to expand the international relations of the revolutionary movement in addition to the Party's relations with Marxist-Leninist parties and organizations abroad. The international representative of the National Democratic Front began to explore possibilities for the NDF to act like the Palestinian Liberation Organization, African National Congress and other national liberation movements in expanding friendly and diplomatic relations with all forces abroad that are willing to extend moral and material support to the Philippine revolutionary struggle on any major issue and to whatever extent. This line in external relations was in consonance with the Marxist-Leninist stand of the Party and the international united front against imperialism.

In 1982, a definite proposal to the Central Committee came up that the NDF or any of its member organizations vigorously seek friendly relations with the ruling parties in the Soviet Union and Eastern Europe as well as with parties and movements closely associated with the CPSU. However, this proposal was laid aside in favor of the counterproposal made by the international liaison department (ILD) of the Party Central Committee that the Party rather than the NDF explore and seek "fraternal" relations with the ruling parties of the Soviet Union and Eastern Europe and other related parties.

This counterproposal disregarded the fact that the Lava revisionist group had already preempted our Party from the possibility of "fraternal" relations with the revisionist ruling parties. More significantly, the counterproposal did not take into serious consideration the Marxist-Leninist stand of the Party against modern revisionism.

Notwithstanding the ill-informed and unprincipled basis for seeking "fraternal" relations with the revisionist ruling parties and the absence of any congress withdrawing the correct antirevisionist line, the staff organ in charge of international relations proceeded in 1984 to draft and circulate a policy paper, "The Present World Situation and the CPP's General International Line and Policies" describing the CPSU as a Marxist-Leninist party, the Soviet Union as the most developed socialist country and as proletarian internationalist rather than social-imperialist, as having supported third world liberation movements and as having attained military parity with the United States. This policy paper was presented to the 1985 Central Committee Plenum and the latter decided to conduct further studies on it.

In 1986, the Executive Committee of the Central Committee commissioned a study of the Soviet Union and East European countries. The study was superficial. It was done to support the predetermined conclusion that these countries were socialist because their economies were still dominated by state-owned enterprises and these enterprises were still growing and because the state still provided social guarantees to the people. The study overlooked the fact that the ruling party in command of the economy was no longer genuinely proletarian and that state-owned enterprises since the time of Khrushchov had already become milking cows of corrupt bureaucrats and private entrepreneurs who colluded under various pretexts to redirect the products to the free market.

By this time, the attempt to deviate from the antirevisionist line of the Party was clearly linked to the erroneous idea that total victory in the Philippine revolution could be hastened by "regularizing" the few thousands of NPA fighters with importations of heavy weapons and other logistical requisites from abroad, by skipping stages in the development of people's war and in building the people's army and by arousing the forces for armed urban insurrection in anticipation of some sudden "turn in the situation" to mount a general uprising.

There was the notion that the further development of the people's army and the people's war depended on the importation of heavy weapons and getting logistical support from abroad and that the failure to import these would mean the stagnation or retrogression of the revolutionary forces because there is no other way by which the NPA could overcome the enemy's "blockhouse" warfare and control of the highways except through the use of sophisticated heavy weapons (antitank and laser-guided missiles) which necessarily have to be imported from abroad.

In the second half of 1986, with the approval of the Party's central leadership, a drive was started to seek the establishment of "fraternal" relations with the CPSU and other revisionist ruling parties as well as nonruling ones close to the CPSU. A considerable amount of resources was allotted to and expended on the project.

In late 1986, some Brezhnevites within the CPSU and some other quarters made the suggestion that the Communist Party of the Philippines merge with the Lava revisionist group in order to gain "fraternal" relations with the CPSU. But such a suggestion was tactfully rejected with the countersuggestion that the CPSU and other revisionist ruling parties could keep their fraternal relations with the Lava group while the CPP could have friendly relations with them. We stood pat on the Leninist line of proletarian party-building

Up to 1987 the failure to establish relations with the revisionist ruling parties was interpreted by some elements as the result of the refusal on the part of our Party to repudiate its antirevisionist line. These elements had to be reminded in easily understood practical terms that if the antirevisionist line of the Party had been withdrawn and the revisionist ruling parties would continue to rebuff our offer of "fraternal" or friendly relations with them, then the proposed opportunism would be utterly damaging to the Party.

By 1987, the Party became aware that the Gorbachov regime was already laying the ground for the emasculation of the revisionist ruling parties in favor of an openly bourgeois state machinery in the Soviet Union and Eastern Europe by allowing his advisors, officials of the Academy of Social Sciences and the official as well as independent Soviet mass media to promote pro-imperialist, anticommunist and antisocialist ideas under the guise of social democracy and "liberal" communism. On the occasion of the 70th anniversary of the October Revolution, Gorbachov himself delivered a speech abandoning the anti-imperialist struggle and describing imperialism as having shed off its violent character in an integral world in which the Soviet Union and the United States and other countries can cooperate in the common interest of humanity's survival.

In 1987, the chairman of the Party's Central Committee made an extensive interview on the question of establishing relations with the ruling parties of the Soviet Union, Eastern Europe and elsewhere. This was made in response to the demand from some quarters within the Party that the Party repudiate its line against revisionism and apologize to the CPSU for having criticized the Soviet Union on the question of Cambodia and Afghanistan. The interview clarified that the Party can establish friendly relations with the ruling parties even while the latter maintained their "fraternal" relations with the Lava group.

In June 1988, the "World Situation and Our Line" was issued to replace "The Present World Situation and the CPP's General International Line and Policies". The correct and positive side of the new document reiterated the principles of national integrity, independence, equality noninterference and mutual support and mutual benefit to guide the Party's international relations; and upheld the basic principles of socialism, anti-imperialism and proletarian internationalism and peaceful coexistence as a diplomatic policy. Furthermore, it noted and warned against the unhealthy trends of cynicism, anticommunism, nationalism, consumerism, superstition, criminality and the like already running rampant in the countries ruled by the revisionist parties.

The negative side included accepting at face value and endorsing the catchphrases of Gorbachov; describing the revisionist regimes as socialist under a "lowered" definition; and diplomatic avoidance of the antirevisionist terms of the Party.

In the course of trying to establish friendly relations with the revisionist ruling parties in 1987 and onward, Party representatives were able to discern that Gorbachov and his revisionist followers were reorganizing these parties towards their eventual weakening and dissolution. Despite Gorbachov's avowed line of allowing the other East European ruling parties to decide matters for themselves, Soviet agents pushed these parties to reorganize themselves by replacing Brezhnevite holdovers at various levels with Gorbachovites and subsequently paralyzed the Party organizations. However, it would be in 1989 that it became clear without any doubt that all the revisionist ruling parties and regimes were on the path of self-disintegration, blatant restoration of capitalism and bourgeois dictatorship under the slogans of "multiparty democracy" and "economic reforms".

It is correct for the Party to seek friendly relations with any foreign party or movement on the basis of anti-imperialism. But it is wrong to go into any "fraternal" relations involving the repudiation of the Party's Marxist-Leninist stand against modern revisionism.

In this regard, we must be self-critical for wavering or temporarily veering away from the Party's antirevisionist line and engaging in a futile expedition. The motivation was to seek greater material and moral support for the Filipino people's revolutionary struggle. Although such motivation is good, it can only mitigate but cannot completely excuse the departure from the correct line. The error is a major one but it can be rectified through education far more easily than other errors unless ideological confusion over the developments in the Soviet Union and Eastern Europe is allowed to continue. Most comrades assigned to do international work were merely following the wrong line from above.
The worst damage caused by the unconsummated and belated flirtation with the revisionist ruling parties in the Soviet Union and Eastern Europe is not so much the waste of effort and resources but the circulation of incorrect ideas, such as that these parties were still socialist and that the availability or nonavailability of material assistance from them, especially heavy weapons, would spell the advance or stagnation and retrogression of the Philippine revolutionary movement. It should be pointed out that the Lava group had the best of relations with these parties since the sixties but this domestic revisionist group never amounted to anything more than being an inconsequential toady of Soviet foreign policy and the Marcos regime.

At this point, the central leadership and entirety of the Party must renew their resolve to adhere to Marxism-Leninism and to the antirevisionist line. We are in a period which requires profound and farsighted conviction in the new democratic rev