THE GLOBAL SYSTEM’S COVERT WAR
It is predictable from this pervasively life-invading programme that there will be maddened reactions among peoples who have been stripped of their life-security but do not know who to blame. Thus ethnocentric conflicts and upheavals have been on the rise across the world since the world restructuring began.1 But the cause remains unspeakable in the corporate press which presents the effects of the restructuring as terrible reminders of our human nature. That the madness is the reaction of dispossessed peoples to the land clearances, loss of livelihoods, stripping of social sectors, and the increasingly rootless command posts of international financial institutions and other corporations is not allowed a public view.
For social tumours generate new corporate markets: manufacturing and marketing more arms for dictatorships and combatants; selling more narcotic stimulants and violence-entertainment to all; producing and selling pharmaceuticals to the environmentally afflicted who are able to afford them; mass-marketing security devices and substitutes in many forms; and, in law like pattern that all can see but no government seeks to interfere with, making the rich fabulously richer in money-demand accumulation, fractioning the rations of the poor, and recreating the environment as more uniform and lifeless. But effects are always disconnected from cause.
A system disease is objective. The more it deprives its members’ access to the produced and natural goods they need to live, the more diseased it is. This was eventually recognized in the Great Depression and world war of the twentieth century, and the recognition and rapid recovery developed minimum life-standards to protect workers’ wages, health and safety, to safeguard the environment against pollution and degradation, and to ensure vital life-goods for all. This was a social contract of civil society between 1945 and the mid-1970s, in fact, a rapidly evolving framework which inhibited the causes and effects of a global corporate dictatorship in motion under fascism.
But these protections of the reproduction and growth of people’s lives rather than the private corporate money-sequences of the greedy did not sit well with them. They are nothing without their money demand, and so are full of resentful fury – duly projected on the government and the poor. They are the spoiled privileged, and they have over centuries militantly opposed maximum work hours, reduction of child labour, minimum wages, workplace safety, labour unions, public health care, unemployment insurance, old-age pensions and social security support-systems. These protections of the members of society were always deemed ‘against private initiative’, or – in the last 150 years – ‘communist’. But the reforms came to pass anyway through the mass struggle and support of social populations in the community agency later analysed as ‘the civil commons’, with waged workers at the fore representing shared life-needs. As these social infrastructures of life-protective standards and social programmes have been attacked, privatized and dismantled by the mutating global money-sequence system, the cancer has emerged. It is programmed to attack any system which provides unpriced life-goods from which they do not make more profit. Is there any exception?
Corporate money-sequences are now for the tied to no community of people. They can leave any society in which effective laws to protect human rights or the environment exist, and are unaccountable to any and all life-necessity of its people. Indeed states are made to compete against one another to serve them – the nature of the occupation. Comparative advantage thus moves from producing goods more efficiently in classical free market terms of multiple local producers in equal competition to globe-roaming oligopolist corporate money-sequences avoiding all life-standards. Rather they maximize money outputs by seizures and consumption of civil commons of every kind from long communally-regulated and biodiverse environments to the higher research of the species to convert their money inputs to exponentially more, period – the cancer system. A world coup d’état has thus occurred and still metastasizes without social populations yet awakened to it – the fatal immune disorder of the age.
The moral system can be defined simply in principle. International money-sequences seeking to become maximally more has been granted overriding transnational rights to rule the world’s production and distribution completely unregulated by social, individual and environmental life-necessities. Tens of thousands of pages of secretly negotiated regulations bind societies and legislatures to a transnational order making illegal whatever life-claim ‘does not honour trade obligations’. Few people have any idea of what has been signed. Fewer still have read a page of them.2
The Unseen Programme of Carcinogenic Assumptions
There are a raft of devious assumptions of this transnational regime which underlie all of its codes and articles. To begin, corporate agents assume the unconditional right to enter and access other societies’ markets across boundaries cost-free, with no obligation to pay any of the direct or indirect costs of building, maintaining or developing any of the conditions of these markets’ existence. All that is required is that corporate agents agree among themselves through mechanisms of inter-government co-ordination to a system of self-protective rules called ‘free trade agreements’ not infringing each other’s rights to this effectively open license to loot. If not no-tax ‘free zones’, then ever lower corporate taxes to guarantee little contribution taxes to pay their way. Free-rider status is the meaning of ‘freedom’ here.
Yet what is owned and exchanged in another society has in fact enormous costs for that society which are borne by its citizens’ past, present and future taxes and collective work over generations. Nonetheless, foreign corporations buy and sell whatever they choose without having to pay for any of the investment and upkeep of even the market infrastructures of the host societies ‘providing an ever more competitive tax environment‘ (that is, more free-riding for corporations). Corporate commodities produced in cheap conditions of no taxes or life-standards simultaneously replace jobs in the host societies, and are required to provide no jobs at all in the markets to which they sell. The home society provides armed-force and police protection across its territory, developed laws to protect its agents and goods, publicly paid-for roads, subsidized utilities, sewage systems, water supplies, and many other domestically financed and highly expensive protections and infrastructure. To these expenses are added still further major public costs of protecting foreign-owned corporations’ patents (for example, in medicines) and enforcing intellectual property rights (for example, over farmers’ seeds and authors’ texts, even against their own growers and writers in the host societies).
Since foreign corporations and domestic corporations seek to lower taxes towards zero, and simultaneously seek subsidies and incentives to make themselves net tax recipients – which many of the richest are – the underlying programme demonstrably rejects any obligation to pay the costs of the publicly financed supports and services they use, and demands ever more from their social hosts as far as can be extracted, or moves on. Current trade regimes grant these royal prerogatives to all corporations within the international territories covered by them, and so to domestic corporations as well by reductions, exemptions and subsidies to keep them, in turn, from ‘competitor’ societies also ruled by the same global license to free ride and loot.
All transnational corporations are served by this new license, but no social host is, including the US itself. All corporations are served by competitively falling tax-rates and bribe subsidies, but no human society is. This is why there is unanimous support by transnational and other corporate bodies for these transnational trade dictates. It is in their monetary self-interest to institute these regimes everywhere, and captive states do so. Societies must then correspondingly reduce their social spending for public needs. In this way a spiral of bankrupting public sectors to promote private corporate money-sequences across border is set into motion with no limits to how far the cancer system invades further. Yet since private corporations are the first to insist that there is ‘no free lunch’ for others, their assumption of the right to ever more free riding exploitation by their own operations – including vast tax funding of this overriding corporate rights system itself across borders – we may see how morally grotesque beyond reason it is – another symptom of the ruling disorder. But the carcinogenic assumptions do not stop here.
At the same time, in staggering contrast to no rights for societies, any possible losses to transnational corporations by societies’ legislation, policy or practice are prohibited in punctilious detail in endless pages of borderless regulations; while no damages and losses to workers, governments, publicly owned resources, environments, communities and any other life-sector or support system are recognized in even one phrase. Indeed the damages and losses inflicted by corporate bodies on their social and environmental life-hosts are simply not to be paid for by the transnational corporate agents who inflict them. They can be safely ignored at a distance. If protest arises, a SLAPP (Strategic Lawsuit Against Public Protest) can be unleashed. If anyone criticizes their commodity, they can be sued for damages. If anyone resists or sues them with less money, they can tie up the courts with teams of lawyers for years and bankrupt the plaintiff (or even a small city resisting a Walmart Big-Box invasion).
The costs of all kinds, and they run into the trillions in dollar aggregates and are limitless in life-costs (loss of life-carrying capacities), are all externalized by these absolutist corporate-rights treaty mechanisms.3 The costs are to be borne by their victims. Corporate persons individually and collectively thereby assume effective immunity from and non-liability for the harms they do to organic social and environmental life across the world, however deadly – from continual big-oil ecocides to non-infectious disease epidemics. Individual, social and ecological life-hosts pay and die instead.
In any other context, we would call this set of assumptions psychopathic – as professor of law Joel Bakan has convincingly shown since the first edition of his The Corporation: The Pathological Pursuit of Profit and Power.4 Nonetheless, they are now assumed as given as transnational corporate vehicles invade one civil and ecological life-fabric after another. Environmental resources are now cumulatively polluted, degraded and exhausted by private corporate exploitation across the globe with no requirement to pay for the damages or prevention. Working people and communities across the globe are simultaneously deprived of their livelihoods, security and ancestral homes by rootless corporations entering their societies, extracting what is required for further money-sequence growth, and then abandoning them for another. None of this process is recognized as a problem even by elected governments which only exhort their populations to ‘compete harder’. It is in this way a different sort of order than witnessed before.
The world’s multiplying Free Trade Zones (for example, the Maquiladora zones on the border of Mexico and the US) are demonstration sites for the pure expression of this system’s ‘freedom’. Such zones grant the transnational corporate bodies they host the freedom not to pay taxes, not to reinvest capital, not to allow workers unions, not to be subject to national pollution laws, not to pay minimum wages, not to have maximum work days or weeks, not to obey established health occupational safety laws and not, in general, to be bound by any rule to contribute to their social hosts, however much they receive in public infrastructure and services or the hard work of host citizens. At the same time, hosted corporations are protected by the limited liability terms of corporate law and trade regime regulations from being held responsible for the environmental, health and social damages which they bring to the human and ecological life-systems they enter and exit.
MANUFACTURING THE PUBLIC DEBT CRISIS: DECODING THE HISTORICAL TURN TO MONEY-SEQUENCE RULE
The puzzle is how and why developed societies with the most advanced social life-support systems in history could allow this conversion of their peoples and environments into dispensable means for private transnational corporate money-sequences. Even the armed might of invading war machines could not manage such an takeover. But it is precisely because the invasion has not been armed or visible that it has infiltrated so effectively. As John Foster Dulles famously said: ‘There are two ways of taking over a society’s economy. One is by armed force, and the other is by financial means.’ Masked throughout by popular slogans and abetted by domestic agents in the corporate, financial, media and academic sectors, the invasion succeeded by mass operant conditioning by corporate-chain communication systems and active assistance by public-sector collaborators at the top.
Citizens had to be convinced that popular social sectors and life-security systems their forebears had struggled for were no longer feasible. They had also to believe that abandoning them flowed from their obligations as citizens. Since neither of these contingencies seemed, it came to be a truism of social scientists that big change to ‘the welfare state’ could not be won without a crisis – and that first came from multiplying public debt to private banks. There is no doubt that the welfare state was deplored by the private corporate sector as a whole. First of all, it provided unpriced goods by public means to citizens. This is the antithesis of the corporate-market model, and rules out profit-making wherever it is allowed to penetrate. The vast financial-security and insurance industries, for example, which have exploded in growth in global market conditions are cut off at the knees by a fully developed social-security system of public pensions and benefits.
Second and more generally, the welfare state makes work in the employment of corporate hierarchies not serving any life-good less attractive, and less necessary. People can increasingly work in the public sector for a public good like education or other social service, what most prefer to private money-sequencing. Then others could live impecuniously on unemployment and welfare allowances undermining the disciplinary apparatus of the starving labour market, a whip and scourge since the fifteenth century.
Third, a welfare state generates regulations to protect life in the workplace, in the environment and natural-resource sector, and almost everywhere else business looks to cut costs of production. It is thus ‘too costly’ and ‘a regulatory stranglehold on business’.
Finally and most dangerously, an activist social state propels a growing tendency of government supported by electorates to manage revenues from publicly owned financial and natural resources, to develop public ownership in strategic areas, to build new sectors of employment and service to life-needs, to employ youth, and even to replace banks in creating and loaning money.
All of these initiatives grew with the welfare state, and the pattern was global. Such developments constituted ‘the threat of socialism’ or ‘communism’ to the standpoint of the money party soon to seize control in a global force system never seen before, but promoted as ‘the global free market’. Its goal was the annihilation of the welfare state step by step. The adversary now was not a foreign power or colonial uprising, but ‘Big Government’, just as it was in the 1930s when Roosevelt’s New Deal was inaugurated. Big Government had to be turned back before it ‘enslaved’ the US people inside their own borders. This may seem a disordered assertion, but even a Canadian law professor could declare in this vein that the Christian community ‘should turn to face the true enemy of all people of faith, the secular socialist state in Canada and its fellow travelers’.5
The strategic difficulty was that public health care, free education, income security for the old and the unemployed, occupational health and safety regulations, public broadcasting and transit, conservation areas and environmental protections, and selective public ownership of universally-used enterprises, were very popular with electorates. Somehow, they had to be smeared, and the label of ‘Big Government’ was the way. The corporate state to defend private power interests abroad and bully the weak at home was easy for the 95 percent to hate. It was gargantually wasteful and destructive. The military-industrial complex which was to spend almost a billion dollars a day during the ‘cost-cutting’ Reagan administration, attacked and threatened any alternative economic order on the horizon with massive armed force.
At home ever more police and prisons for non-white and impoverished US citizens were loathed by thinking and oppressed people, but they never counted as ‘Big Government’. In the ideology of reverse projection now coming to rule it was only public sectors and policies that served people ‘lives that were targeted for demolition. Against all intuitions about the meaning of terms, ‘Big Government’ meant assistance to the poor, the sick and the old, and protection of the workers and the environment against corporate toxins and pollutants. It meant ‘binge spending on social programmes’ like pensions and Medicare, ‘suffocating regulations’ on industrial effluents and hazardous working conditions, and the ‘culture of dependency’ of destitute families and children on ‘government handouts’.
What made these public life-goods abhorrent to the money party was that they had no market value, and yet they cost money. Society must therefore undergo ‘the second American revolution’, as a Republican Congress later termed it, and sweep the world clean of all such ‘entitlements’ to life-goods not defending and profiting corporate money-sequences. This ruling principle is not saleable, so a perpetual blitz of attack slogans sponsored by the rich went into high gear and has not stopped since. The entire apparatus of the social security system was a ‘total failure’. The ‘environmental bureaucracy’ was ‘a terrorist organization’. ‘Politicians were spending the country to death.’ ‘Liberals’ were ‘destroying the moral fabric of America’. Above all, government spending on social programmes was ‘a disincentive to work’, ‘a destruction of the family’, ‘an assault on business’, a ‘distorting influence on the market’, ‘an unbearable tax load’, a ‘discouragement of private investment’, ‘big brother telling people how they had to spend their money’, ‘an attack on individual initiative’, ‘the undermining of freedom’, ‘forced helplessness and dependency’, ‘a campaign to discredit traditional values’, and ‘an assault on citizens’ faith in God’. They ‘raised the costs of production’, ‘restricted the movement of private capital’, ‘coercively redistributed wealth’ and ‘enslaved taxpayers’. The unstated first premise was and remains that only private money becoming maximally more can be ‘America’s freedom’.
Yet still the people loved the life-security which social programmes for unemployment, age, and so on, gave them. So a war had to be declared on something else than this ‘insidious welfare state’, this ‘greed for entitlements’, this ‘insane spending spiral’ if ‘misled electorates’ kept supporting it. The civil commons developing outside the control of the private money-sequence system was the real enemy throughout, but that could not be said. Thus a plan to ‘curb the excess’ had to be formed from the commanding heights of the Oval Office itself to ‘clean up the mess’ and ‘make America great again’ with the real agenda never named.
A strategic conjuncture of government debt and inability to pay it was then constructed to change the course of history. Before it was played out, it had reversed almost every gain of the electorally responsible public sector of universal social programmes and entitlements which had developed across the societies of the globe since the Great Depression and the Second World War, and before. Two large-scale operations did the trick. They were quietly put into motion with the Reagan presidency which was militant in its programme to ‘turn back the tide of state dictatorship’ within as well as without US borders. ‘State dictatorship’ had a domestic referent as well as a foreign one. It meant social security programmes to protect and enable citizens’ lives so they were not dependent on and destroyed by private money-sequence rule with no limits.
Military programmes to threaten and destroy social life-support systems outside the US became more sacrosanct than ever. But social programmes to serve life within were the internal enemy to be vanquished – universal entitlements to health, education, income assistance, old-age pensions, environmental protection, public broadcasting, the arts – the list was as long as what could be enjoyed without a money price for private profit. This was the underlying determinant of the rage against all social programmes and goods. But the ultimate weapon now was not visible, and it was not the nuclear or armed-force terror that life-defenders had their eyes on. In the case of the Soviet Union and its allies, the armaments race was the means to achieve the unmarked objective – bankrupt the enemy state. The strategy succeeded. But it was not until years later that the bankrupting part was publicly acknowledged by Republican insiders triumphal in their ‘victory over the Soviet Union’.
In the case of the internal enemy, the method that escaped detection was in principle again the same as now – bankrupt the state, in this case the welfare state that was blocking, appropriating from and subverting every step of the competing global market model from within rather than from without. How do you do that to a wealthy government with popular social programmes?
Strategic analysis is distinguished from conspiracy theory by the fit of the analysis with the known facts and established system-deciders. In the corporate system we have observed mutate from the traditional and classical models of a free market, the system-deciding property has been disconnect from all parameters except maximally multiplying money demand at every moment of its sequences. Given this inner logic, it is not surprising that attack upon an opposing system should be at the level of escalating its money inputs beyond manageable levels, while reducing its revenues at the same time. In the case of the Soviet Union, this strategic plan was managed by an arms race of escalating expenditures at one end (almost a billion dollars a day at its height by the US – still this in real terms); and by embargo, boycott and trade-pariah status at the other end to ensure the reduced revenues of the much poorer USSR to pay for these ever-rising costs.
In the case of the welfare state, such that existed in the US,6 the underlying attack would be by the same method of debt trap as now: escalating public expenditures on the military and other system enforcement within and across borders as well as state subsidies to dominant corporations; and radically reducing revenues by ever vaster tax-cuts and transfers of public revenues to transnational corporations and the rich at the same time. This is the underlying meaning of the corporate state.
Yet because this social infrastructure to serve the life of all citizens and those in need had become part of the fabric of society’s life, its destruction was not a preference that could be openly sold, even in the context of a managed public discourse. An evolving civil commons had developed over decades of political response to historical demand. After the World Depression and the Second World War, social cataclysms which had almost destroyed the capitalist-market organization of Western society, a more life-coherent remake of the capitalist system had begun to occur. The ‘welfare state’ was the outcome of this reconstruction, beginning with Roosevelt’s New Deal in1944.7 But now it was the historic target of the new money-party crusades. The apocalyptic movement was focused on the ‘forces of evil’ which stretched around the globe in a ‘worldwide Communist conspiracy’ turned silently inward at the same time on its own social support systems.
Thus in the words of David Stockman, Reagan’s first Director of the Office of Management and Budget, the large-scale strategic goal of the Reagan planners for restoring the market to proper rule was to ‘cap social spending by increasing government debt’.8
Mutations of State Policy to Turn Social Spending into Money-Sequencing
Escalating government debt in the first instance consisted of three simultaneous policy mutations. The first was to increase military-industrial complex spending (then by over $140 billion a year). This was an increase greater than many country’s GNPs, and produced nothing the public could use for life. It was, therefore, certain to entail an inflationary uptake and to put pressure on government spending, ever more extreme pressure as compounding interest-charges rose, which they soon did to historic highs ‘to get America on track again’. The Reagan administration loaded public spending onto private corporate armament production to unheard of levels, increasing the already mammoth military budget by just under a trillion dollars over seven years. This runaway expenditure of public revenues for the purchase of products with no productive function or future value, certainly exemplified ‘wasteful government spending’. It was also, unseen, a propeller of the emergent cancer system. It spent public money at the rate of almost $1 billion a day to enrich the most powerful industrial corporations (including General Electric, Reagan’s former employer) which had co-operated in financing Reagan’s presidential campaign. Unnoticed, it rapidly escalated US government debt to unpayable levels. The economy was thus decisively steered away from public expenditures on citizens’ lives towards a tidal wave of payouts and tax giveaways to transnational corporations, from life-destroying weapons makers to banks and bond-dealers producing nothing.
This rising tidal wave of public money spent on the opposite of life-means provision occurred during the same period of new major offensives against social justice movements of the poor in Latin America and Africa. This was called ‘the war against World Communism’ and ‘terrorism’. By militarily attacking and simultaneously bankrupting states and social movements committed to economic alternatives to foreign corporate control, the US arms buildup performed two essential functions for the mutations of money-sequences now emerging as dominant. It enriched transnational corporations and destroyed civilian and armed oppositions to them at once.
Perhaps the deepest policy pattern over the decade went unrecognized and remains so today. By tidal-wave government spending on armed force aggression and tax cuts to corporations and the rich at the same time – all to serve the ruling money party across borders – public fiscal capacities were set into an ever deeper hole. Even a decade after Reagan left office, the US defence budget annual military spending was still above pre-Reagan levels although the ‘enemy threat’ it was designed to repel had long ceased to exist (US military spending has continued multiplying to over $700 billion a year today). As Paul Volker, the President of the US Federal Reserve Board during the Reagan years, frankly described the strategy of bankrupting government to get social spending in line (emphasis added): ‘The novel theory [that came in with the Reagan government] was that the way to keep spending down was not by insisting taxes be adequate to pay for it, but by scaring Congress and the American people with deficits.’9
The simultaneous strategic conjuncture in the raising of government debt to levels which would leave ever less for social spending was unprecedented tax-reductions to the wealthy and to major corporations. Their effect, predictably, was to reduce government revenues by hundreds of billions of dollars, while simultaneously enriching wealthy beneficiaries and corporations (which, we may recall, bankrolled the Republicans into power). The Reagan government set legislated its giveaway of federal tax revenues within a year of entering office, handing out a budget-estimated $540 billion of government revenues in one tax-bill. This radical redistribution of public wealth went entirely to the richest 20 per cent of the population, and 77 per cent of that to the richest 1 percent.10 The bottom 80 per cent ended up net losers after this ‘tax reduction for the American people’. This government redistribution of income upwards accompanied a simultaneous reduction of the share of wages in national income to its lowest level since 1929.11
Before this $540 billion redistribution of public wealth to the market’s richest players was implemented, there was conclusive evidence that the tax cut was not, in fact, going to ‘reinvigorate the American economy’, as the new ‘supply-side economics’ had predicted. On the contrary, government economists themselves warned, behind closed doors, that the tax reduction programme was certain to raise the government’s deficit by huge margins. ‘We’re going to have huge deficits’, the records show that Stockman’s economic analysts at the Office of Management and Budget reported to the President’s policy directors.12 ‘Huge deficits’, however, were not a consequence which deterred the Reagan administration. Although it had proclaimed throughout the 1980 election that it was going to ‘end the deficit’, it in fact more than tripled it by the time the Republican administration left office.
The President’s senior policy advisers accordingly disclosed none of the facts of the experts’ forecast of ‘huge deficits’ even to the US Congress, and as Stockman observed, ‘led inexorably to the massive deficits of the 1980s [and after]’. Nobel Prize-winning economist Paul Samuelson observed that the deficit consequence was predictable by known market principles, and ‘Wall Street panted for the tax cuts for their favourable income effects. Once Wall Street got its heart’s desire … it did what came naturally. It dumped its bonds, bidding up interest rates [and government debt] in the process …’13
The second piece of the overall pattern was now in place. The pattern of ‘revolutionizing government’, as its heirs openly called it, could deepen its hold and spread from 1981 to the end of the century and beyond. Observe that ‘reducing the deficit continues over 30 years later to be the first policy direction of now “responsible” governments; that ever more brutal cuts to social spending is the “austerity” demanded; and that ever more tax cuts continue to go to corporations and the rich as “necessary to compete”’. This mutant new programme was and remains bizarrely incoherent in real-economy terms, but only grows and spreads deeper through societies across the world. Simultaneously social spending to meet life-necessities at every level, which only increase in their real-economy demands, keeps being eaten away as private money-sequences multiply to ever greater extremes, waste and social and ecological depredation.
The third mutation of state policy was the most effective in the short term on a worldwide scale. It was the ‘monetarist policy’ of high-interest rates paid to private transnational banks. These compounded rising government deficits to unpayable levels, and again led to the full-scale campaign to reduce and eliminate social programmes. Dismantling of social infrastructures ‘to pay off the public deficits / debt’ occurred across the globe as ‘structural reform’, and it continues today in Europe itself. As the lead Reagan administration was escalating military spending by $942 billion of new budgetary commitments, and simultaneously transferring away another $542 billion of government tax revenues to America’s wealthiest taxpayers, for a total of $1,484 billion of lost revenues to the public sector, it was also compounding its interest payments on rising deficits to unprecedented double-digit levels so the widening breach in public revenues would become insupportable and irreversible. The Federal Reserve’s escalations of interest rates (bearing in mind that its base is twelve privately-owned branches dominated by Wall Street and Goldman Sachs) came one after another to deep recession affecting most other countries in the world for whom the US dollar is the peg-currency. Foreign debtor governments, in turn, must pay above US prime rates to receive loans and must pay at US dollar rates. Thus the mutant ‘monetarist policy’ of the Reagan administration impacted across the globe. It put mounting pressure on virtually every public sector in the world that has never stopped for long since.
Escalating minimum interest rates far above inflation predictably raised public debts in two ways, and both pulled the plug on the public sector’s capacity to pay for its social programmes. First by increasing interest-demands on debt from two to four times higher than previous levels, indebted governments were forced to pay vastly escalated interest loads compounding as they accumulated. This in itself was enough to propel the growths of public debts across the world even as social programmes were being dismantled. By the same pressures thousands of small businesses predictably went bankrupt from the multiplied interest burdens and loss of affordable loans, while millions of workers lost their jobs from resulting layoffs in the policy-created recession.14 The ‘belt tightening’ fell entirely on the lives of those outside the rapidly swelling money-sequence system led by Wall Street. Money could be loaned by banks at the escalated rates, while corporate conglomerates could write off 46–70 per cent of interest costs.15
On the other hand, prescribed interest rates of 20 per cent prime deprived governments of hundreds of billions of dollars of tax revenues which were no longer received from bankrupt small business or from millions of now-unemployed citizens. At the same time, governments paid out ever more for police, prisons and mass disemployment costs in the aftermath of millions of suddenly jobless and ratcheted-down workers and their families. Indeed government payments of the huge interest rates to the private banks they backed all but bankrupted governments themselves.
None of this was publicly criticized because it much increased the value of money-sequences to more. It was called ‘making the hard decisions’. As for the out-of-control government debt, it was paid to private banks by hollowing out social programmes while banks and high incomes became much wealthier. At the core of the whirlwind redistribution of wealth lay constructed public debts falsely blamed on social programmes. Recall Volker’s comment: ‘to terrorize the American people with deficits’.
The Case of Canada as Representative of the World Revolution Backwards
In neighbouring Canada, as elsewhere across the world, this third mainspring of ‘increasing government debt to cap social spending’ was the most decisive determinant of escalating government deficits. In the first and pioneering analysis of this new pattern of government ‘deficit crises’ in North America, a 1991 Statistics Canada study was headed by an economist who was still concerned to understand the cause of the debt all were blaming on ‘excessive social spending’. Hideo Mimoto discovered that, in fact, 44 per cent of the debt rise since 1979 was due to tax write-offs to corporations and rich taxpayers, and 50 per cent due to higher compounding interest rates.16 This study was immediately, and without counter-evidence, repressed by the government of Canada’s Ministry of Finance. The Conservative, bond-merchant Minister, Michael Wilson, had already launched a major political campaign with ex-branch plant president and Prime Minister, Brian Mulroney, ‘to slash the deficit’ by ‘reducing unaffordable social spending’. A rewriting of the Statistics Canada study, already approved as accurate by over 20 government and other economists, was ordered, and Statistics Canada’s budget was cut in future federal budgets.17
The mass media declined to report any of these facts. Even a subsequent private-sector study which revealed that the cause of the federal government’s still escalating debt was not social spending, but the interest-rate policies of the government was silenced.18 The Bank’s new Governor, an ex-Director of the International Monetary Fund, raised real interest rates to levels 5 per cent higher than the US ‘to reassure the markets’ and ‘foreign bond holders’ – that is, transnational money-sequences now becoming the cancer system. At the same time, the publicly owned Bank of Canada itself began an unpublicized process of privatizing its holdings of Government of Canada bonds thereby transferring interest payments to private banks instead of the government, the Bank’s sole shareholder. All the while, the publicly-owned Bank is authorized by the Bank of Canada Act to buy and sell bonds for the government to keep interest payments in public hands, and to lend to other levels of government – a crisis-solving route for government debt that was and remains taboo to mention in public discourse. In fact what leverage the government of Canada had in mandatory reserves for the big banks was covertly eliminated with no media or party reporting the move to zero cash reserves. All continued in accordance to plan.
Government debts and deficits quickly compounded despite all the social programme axing. Firings of 100,000 federal public servants, cut-backs in environmental surveillance and protection systems, and privatization or abandonment of evolved public transport, communication and cultural infrastructures released further public funds to feed ever more demanding money-sequences, but the debt still climbed by up to 21.5 per cent prime interest rate set by the Bank of Canada to ‘wrestle inflation to the ground’, costing in fact $140 billion in reduced national productivity for each point drop in the money inflation rate. To any suspicion that might arise at the horrific costs of the policy-driven debt, the immolation of the public sector, and the ruin of people’s lives by disemployment and small-business bankruptcy by the constructed deficits, there was always the perpetual blame of the victims still deployed today – ‘our society has been living beyond its means’.
The transnationally governing logic throughout remained as set in the US – to terrorize the public with deficits to eliminate social programmes. But Canada’s multimillionaire Minister of Finance, Paul Martin, was only too glad to oblige still further by later slashing the heart of Canada’s federal expenditures on social spending to permanent decline thereafter, for which he has been hailed in the corporate media ever since. As always throughout to now, the corporate press headlined the ‘deficit crisis’ daily while continuing to blame against well-established fact ‘excessive social spending’ for the debt rise – in fact, 6 percent according to Statistics Canada itself (since defunded).
By the end of the Reagan government’s tenure, its choice-path to raise government debt so as to reduce social spending had achieved the unmanageable debt required. Public-sector debt had gone from $907.7 billion in 1980 to $2.643 trillion in 1988.19 In one-better, junior partner emulation, Canada’s federal debt more than tripled during the same period. But with its Bank of Canada interest rates pegged another 4–5 per cent higher than historically high US rates to ‘stem inflation’ – that is, to hold the value of money-sequencing to more – federal government debt still kept skyrocketing: from $94 billion to $508 billion, more than five times its level by 1995 even as government social spending continued to be reduced from one level to the next ‘to pay down the deficit’.20
Bloodlust of the Neo-Cons as Counter-Revolution Succeeds
Thus strategically planned government deficits track-switched government from serving the common life-interest to private money-sequence fixer and servant. The axing of the society’s evolved common life was ever after followed with still mounting demands for more ‘privatization’, ‘tax cuts to business’, ‘financial accountability’ and ‘austerity’ for the poor, and ever more to money-sequences with no life-function. Corporate tax rates in Canada fell from over 50 per cent of government revenues in Canada in the 1950s to 7 per cent by 1996. Slashing of Canada’s health, higher education and social assistance spending was darkly preceded by state-subsidized explosion of armaments sales to the Third World, up almost 600 per cent from 1990 to 1994.
Once free of any obligation to anything but multiplying private money demand, anything left for any life-protection was ‘unaffordable’, a ‘nanny state’, ‘politicians on a spending binge’, ‘dependency on government’. The money-party crusade to abolish the common life-ground of society entered a feeding frenzy which has not yet ended. Its moving line is axing government revenues for public health, old-age pensions, social assistance, income security, education, the arts and culture, public transportation, environmental regulations and conservation areas, ecological monitoring and science, public broadcasting and information, and human rights. There is no limit to the cancer system. Wall Street Journal and Forbes Magazine columnist, David Frum, foamed at the mouth to eradicate all public programmes protecting citizens’ lives.
I would say on a single day this summer we eliminate three hundred programs, each one costing a billion dollars or less. The big programs, like welfare, Medicaid, and Medicare will take a little time to get rid of.21
William Kristol competed in echo: ‘You cannot in practice have a federal guarantee that people won’t starve.’22
In Canada nine months later, the publisher of Canada’s ‘national newspaper’ of money-sequencing, the Globe and Mail, William Thorsell, called for another axe to lop off still more from the $400 million poorer school budgets. ‘Cheer up and take out another 100 million!’ he cracked.23 Observe throughout the thrill of triumph in the financial starvation of the public realm that stands in the way of the universal invasion and spread of the cancer system. In Ontario, Canada’s richest province, the ‘Reagan revolution’ registered 15 years late on a widely disemployed and resentful rural populace as an idea whose time had come – the bigot vote the money-sequence cancer moves by. Called again ‘common sense’, the ‘the need to cut social spending to pay down the deficit’ and ‘the necessity for a 30 per cent tax-cut’ at the same time coincided in Orwellian certitude of contradiction. Decreasing and increasing public debt at the same time was now a self-evident truth in the backwaters of Western civilization as well as at the front.
‘Doublethink’ is the learned capacity to hold logically contradictory propositions in the head at the same time without cognitive notice. What made the self-contradictory consistent, however, was that both policies attacked what was not the money-sequencing cancer. Redistributing wealth to it from social expenditures on public health, education, worker safety, and environmental protection had become self-evident. The pattern was the same across decades. ‘Reducing government deficits’ of money owed to private transnational banks supported by governments was absolutely necessary to cut all social infrastructures of health, education and life-protection. Government for the people is for transnational money-sequences. Freedom is death. People on social assistance reduced to below subsistence levels, university funding quartered from former levels, health care and treatments privatized and defunded, conservation areas transformed into saleable municipal assets, municipalities dispossessed of transfer payments for their services, occupational safety inspectors and environmental police reduced to a fraction of their previous strength, farm workers deprived of the right of collective organization, teachers fired in the thousands ‘without any cuts to the classroom’ – all these were called ‘the tough decisions to release present and future generations from crushing government debt’. Now over 20 years.
New Zealand’s global market agents on the other side of the world managed the destruction of one of the world’s leading public sectors in even shorter order than their North American counterparts. In unwitting symbolism, the stripping of society for private money control began in1984. Here too a financially managed strategy of war by attrition depended on creating the appearance of runaway public deficits and debt – which here as well was financially managed. An alleged plan to devalue the currency by 20 per cent gave financial moguls four weeks’ notice that the value of their New Zealand money would so decline, and they moved as much of their assets as possible out of the country. A financial panic followed, but not as a debt crisis, but – just as common in the emergent cancer system – an engineered foreign exchange crisis.24 Following this managed financial flight of the country’s private money capital, a new financial leadership deregulated financial transactions, cut taxes on business and the rich by 12–50 per cent, privatized $16 billion worth of public equity and institutions, and slashed the public sector at every level (reducing welfare income by 25 per cent and charging fees for public education).25 All the while, ‘social overspending’ was blamed for the crisis.
New Zealand was congratulated by corporate chain media across the world for performing an ‘economic miracle’. As always, the ‘debt crisis’ was not solved by the public sector’s dismantling because it was not caused by it. The federal government’s deficit more than doubled by the ‘market reforms’ which had gutted the productive economy while its overall debt continued to climb – much as Greece over a quarter of a century later.26 But social amnesia is the nature of the macro cancer system. Its inner logic is not remotely to solve debt crises – which can be done overnight by a public banking system. It is to keep governments debt-enslaved permanently while continuing to feed on public sectors and resources. The programme is coded for another form of reproduction and growth than what has been so far understood.
THE INNER LOGIC OF THE TRANSNATIONAL CORPORATE RIGHTS SYSTEM
The trade and investment treaties under many names that now cross the world have an inner logic that is not found on their face. Once laid bare the predatory nature of this meta-programme and how it is structured to consume and despoil social and ecological life and life-support systems becomes clear. But it is as repressed as the cancer diagnosis itself. Originally minted behind closed doors by corporate trade lawyers and adjudicated by panels of them in secret with unpublished proceedings, its ruling form exceeds any colonial empire of the past in its absolutist, detailed and one-size-fits-all monolithic demands. It establishes for all societies a supra-constitutional bill of unaccountable transnational corporate rights to multiply their money-sequences and profits across all that can be bought and sold in the world, increasingly everything on the planet. This nature of the now world-ruling system is incontrovertible, and no-one has refuted one element of this programme in 20 years of publication and papers. In essence, the rights of the private transnational corporations which override all prior or enacted laws are:
- to export their commodities or services across all borders of locale or nation to other societies’ markets with no conditions attached;
- to unilaterally purchase and own any built structure or productive capacity of any other signatory nation with no requirement to sustain its viability, employment-level or location in the home country;
- to own any saleable natural resource of other countries and to have national right to any concession, licence or authorization to extract its oil, forest, mineral or other resources with no obligation to sustain these resources, or to use them in the interest of the host society;
- to profit from any commercial enterprise with no requirement to reinvest in the enterprise or any other enterprise in the country in which the resources have been received and the profits earned;
- to create credit and thus increase domestic money supply with no restriction on the amount of new currency demand so created in the host economy, however inflationary to the economy, or bankrupting to domestic citizens;
- to bid for and own any privatized public infrastructure, social good or cultural transmission without any limit of foreign control permitted by law;
- to access any domestic government grant, loan, tax incentive or subsidy with the same rights as any domestic firm with no means test, locale requirement or public-interest distinction permitted;
- to be free of any and all performance requirements of job creation, domestic purchase of goods, import-export reciprocation, and technology or knowledge transfer to the host society;
- to repel as illegal any national standards of human rights, labour rights or environmental protection on goods produced in and imported from other regions or nations.
The Genetic Code of the System: To Convert All Life-Goods to Private Money-Sequences
The corporate rights system of rule is structured to invade all life-organization that does not serve private transnational money-sequences to maximally more. Thus all provision by domestic governments of goods to their citizens by public ownership or control are declared ‘monopolies’, and thus bad. That means, decoded, they are not controlled by private money-sequences open to takeover. Even food subsidies for the otherwise starving are ruled out by this growth system – and so they have been relentlessly abolished across the world. Monopolies of knowledge are, however, not monopolies, because they proprietary patents and copyrights to serve corporate money-sequences to become maximally more. They are good – even if their monopolies leave dying people without medical cures found by publicly funded scientists, or researchers without access to the knowledge created in universities.
Any restrictions on private money-sequence pricing and distribution of goods are ‘an interference with business freedom to transact’. And any attempt to keep the business, its jobs and profits at home is protectionist. Any public non-profit ‘monopoly’ in health care, education or other universally accessible life-good is already, therefore, to be bound by the obligation to act ‘solely in accordance with commercial considerations in the purchase or sale of its good or service’; to ‘in particular’ be prevented from the ‘abusive use of prices’ which might adversely affect the market share of corporate investors; and, in general, to be liable for damages for any ‘lost opportunity to profit from a planned investment’ which might be incurred by public involvement in providing citizens with goods in which private foreign corporations assert an interest in ‘freedom to transact’ and ‘expected profit opportunity’.
There is no limit to the private corporate money-sequence rule. Worker buy-outs of enterprises, or return of their ownership to home investors are therefore, not to be permitted any favourable loan, tax or start-up cost by public authority, since this constitutes a ‘discriminatory treatment against [foreign] investors’. ‘Educational products’ as well as any other product, except military, the one article of trade given protectionist walls, cannot have any limit on foreign ownership. The regulating principle of all these blanket rights and powers sought by and largely gained by private, transnational corporations is that no society any longer has the power to protect the ownership or control of its markets, its built assets, its environmental resources or its right to provide life-goods to its citizens if any transgresses corporate money-sequence ‘freedom to transact’.
Any requirement for long-term commitment to society’s natural resources or high-employment sector is ruled out. Any other condition which compromises the right of foreign transnationals to move their profits and assets from the home society to other jurisdictions with lower environmental, labour, corporate-tax or safety standards is forbidden. Where now can we find exception in the Western world and its client states? Needless to say, all the immense costs of the new regime to privilege transnational corporate money-sequences as absolute rights are built in. All costs of planning, negotiation, enforcement, adjudication, and liabilities for infraction of the new world rule are paid for out of the public purse.27 What unifies the limitless prescriptions of this extra-Parliamentary rule is the single, final goal of releasing transnational corporate money-sequences from any law of national, provincial, or local authority. Why not then life-protective laws for all? ‘We will oppose’, stated the President of the US Council For International Business to US officials on March 2, 1997, ‘any and all measures to create or even imply binding obligations for governments or business related to environment and labour.’28
Dispossession of citizens and communities of their collective rights to protect their lives and resources as their own is, in the end, grounded on the principle that unfettered money-sequences have overriding right to multiply, circulate and metastasize freely through all social and natural life-hosts across the world, appropriating, exchanging, extracting, exploiting and restructuring all organic, social and ecological life-hosts as private money-sequences to more with no right of any to limit or resist the ‘free movement of capital and commodities with no barriers’.
This is how the cancer system’s invasion and occupation of societies proceeds – by removing all defences of social hosts against it.
PREDICTABLE SYSTEM EFFECTS IN DESTROYING PLANETARY LIFE-ORGANIZATION
In short, the transnational corporate money-sequence system does not produce more material prosperity and well-being, but increasingly the opposite – ever more money demand for the top-end, and ever wider and deeper deterioration of life-means for ever more of humanity and the global biosphere itself. As its endless demands have been imposed on and penetrated across social and environmental hosts, the marginal value of labour has fallen for most workers; poverty and unemployment rates have increased to unprecedented post-Depression extremes; child malnourishment has escalated across both developed and less developed economies in rising absolute and relative numbers; social security, education and public health infrastructures have been systemically dismantled; and environmental degeneration of atmospheric conditions, water, soil, forests, and species diversity has advanced to various levels of planetary depletion and collapse.
But what is fatefully not recognized is that every one of these degenerate trends of the system – exactly defined in Chapter 1 – follows from its implementation and spread. This is the unspeakable causal mechanism spreading the cancer system and impeding social immune response. Because there have been geometrical increases in financial transactions and dominant stock market indices where there are not meltdowns, no problem registers in the ruling money-sequence measures. But their gains provide no evidence against any of the deepening patterns of life-degeneration beneath them. They only mask them in money-sequence co-ordinates as life-capital is consumed and depredated on all levels.
Thus climatic and atmospheric pollution unleash increasingly widespread and catastrophic effects in weather extremes and turbulences which science cannot keep up with. One-third of all children of the world are undernourished, and are rapidly increasing in number.29 Despite sufficient food supply, the growing social sectors of impoverished people lack sufficient income to buy food and shelter. Some 30 per cent of the world’s workforce is unemployed by market demand, while most new jobs are insecure, low-paid or part-time.30 Almost one hundred acres of the earth’s rainforest is cut every minute by private corporations. Up to 200 species become extinct every day from habitat destruction.31 Eighty countries with 40 per cent of the world’s population now suffer serious and growing water shortages. Twenty-six billion tons of topsoil are lost to soil erosion every year across 50 per cent of the world’s remaining arable land.32 Stratospheric ozone depletion by industrial pollutants is causing hundreds of thousands of human cancers a year, the destruction of amphibian species’ capacity to reproduce, and systematic depletion of phytoplankton at the bottom of the planetary food chain. More than 60,000 square kilometres of land in over 100 countries becomes desert annually, hastened by global warming caused by industrial effluents which have risen 16-fold in the past 30 years.33 Everywhere, coastal waters and coral ecosystems bearing the most biologically rich life-zones of the world are being destroyed by pesticide and fertilizer run-offs from farms and plantations producing for market sale. The ocean bottoms themselves are being strip-mined of fish and aquatic life across vast tracts by factory-trawlers that drag the ocean floors for marketable fish stock whose take has increased almost more than fourfold in the last four decades.34 The poor countries of the South pay approximately half a billion dollars a day in compounding interest payments to wealthy banks and financial institutions.35
The connected profile of these figures forms a global pattern of systemic life-devastation without historical precedent, and it has been advancing without any effective policy response whatever for over 20 years. The global corporate system is incontrovertibly out of control, but there are only more calls for more of its growth. Radical market reforms of the East European and Soviet economies have long ago demonstrated the ‘miracles of market reform’ on human populations in laboratory conditions. Following Russia’s ‘market liberation’ in 1991, 80 per cent of the population who had previously lived with food security, basic housing and medical care lost so much by the restructuring and privatization of their economies and livelihoods that they now lived in ‘destitute or semi-destitute’ conditions.36 The ‘failure of the capitalist experiment’ in the once-mighty Soviet Union is not yet, however, a phrase that is speakable in the communications field of the global market.
Poland, Czechoslovakia, Romania and Bulgaria were not spared. They lost between 20 and 30 per cent of their GDPs and much of their social security infrastructure by 1992 through market reforms to liberate them. The global market restructuring experiment at the same time precipitately disemployed workers, reduced wages and variously cut back social programmes across the rest of the world – far worse 13 years later than when this was written.
But in response to these worldwide conditions of social decline, increasingly life-insecure populations have been treated to a continuous and non-stop monologue of market slogans in denial of all life-reality. Once more, we need to search for exceptions to this drowning out of life-fact to get a sense of the unrecognized system cancer. There is a lock in this programme that has closed off the feedback to its growth and spread. Even the world’s leading education systems are, by the description of one former British minister on the inside of the process, being reprogrammed by global market prescriptions ‘invading the curriculum jurisdictions of universities and schools’.37
Once we recognize the blanket exclusion of effective regulation on behalf of rights other than those of corporate money-sequences, the overall design of long-term effects is revealed in lucid form – ever-mounting social malnutritions, starvations, disemployments, civil breakdowns, dismantlings of social sectors, and ecological devastations across the world. Every one is traceable back to the money-sequence code of the global cancer system.
Before Somalia disintegrated into civil war, its people’s traditional agricultural lands were taken over for oil drilling and agribusiness, turned to monoculture cash-crops and extraction for export, exhausted by single-crop and chemical farming, and, as across Africa, set into a cycle of desertification. (See, for example, Kristin Dawkins, NAFTA, GATT, and the World Trade Organization: The Emerging New World Order, Westfield, NJ: Open Magazine Pamphlet Series, 1993, 3–7.) In the former Yugoslavia, ‘Secessionist tendencies … gained impetus precisely during a period of brutal impoverishment of the Yugoslav population. … A US financial aid package [preceded the impoverishment] in exchange for a devalued currency, the freeze of wages, a drastic curtailment of government expenditure, and the abrogation of the socially owned enterprises under self-management … including the lay-off of more than 600,000 workers of a 2.6 million workforce … [followed by] a decline of GDP by more than 50%’ (Michel Chossudovsky, ‘Dismantling Former Yugoslavia, Recolonizing Bosnia’, Science for Peace International Conference on the Lessons of Yugoslavia, University of Toronto, March 20–23, 1997).
The extent to which transnational corporate agents control the legislative process of trade and investment with no public accountability is indicated by the construction of the apparently neutral Codex Alimentarius to regulate the minimum standards that can be applied to food and drug commodities (the closest these transnational regimes come to considering life-requirements in their laws). Between 1989 and 1991, 2,562 out of 2,587 representatives came from corporations as ‘the private sector’. Yet the Codex has the imprimatur of the UN Food and Agricultural Organization and the World Health Organization with such standards as DDT residues 50 times greater than permitted under US law These standards prevail if any government seeks to prevent the free entry of foreign commodities in accordance with its own laws. (Figures are drawn from David Korten, When Corporations Rule the World, San Francisco: Berrett-Koehler, 1995, p. 179.)
Private corporations in the US alone are estimated to cause $26 trillion of unaccountable damages a year to employees, consumers, environments and communities. (Ralph Estes, Corporate Crime Reporter, November 13, 1995, pp. 11–13.) Estes is a US professor of business management.
The US welfare state may seem an oxymoron to European consciousness, but its universal entitlements were what the Trilateral Commission deplored in its ‘Crisis of Democracy’ position paper cited ‘Previously passive and unorganized groups in the populace, blacks, Indians, Chicanos, white ethnic groups, students, and women’, it stated, ‘now embark on an effort to establish their claims to opportunities, positions, rewards, and privileges which they had not considered themselves entitled to before’ (Dobbin, The Myth, p. 162). For more savage attacks on the universal entitlements of the welfare state, see the comments by syndicated columnists David Frum and William Kristol later in this chapter. In the logic of reverse projection governing the carcinogenic system, entitlements of free bank money and corporate subsidies in trillions disappear into accusations of the poor.
Franklin Delano Roosevelt’s 1944 State of the Union Address introducing this ‘Second Bill of Rights’, including the welfare provision for children abolished by the Clinton administration in 1996, declared ‘the right’ to ‘a remunerative job’, ‘decent living’, ‘decent home’, and ‘adequate health care’, and concluded: ‘Unless there is security here at home, there cannot be lasting peace in the world … we shall have conquered our enemies abroad, [and] yielded to the spirit of fascism here at home.’
All of these facts are drawn from a draft of the Multilateral Agreement on Investment, Paris, January 13 Draft, 1997. The draft in question includes reservations from specific countries on specific clauses – for example, Norway with respect to the MAI’s inclusion of ‘authorizations, licences and concessions for the prospection, exploration and production of hydrocarbons’, a right of the home country which Norway’s negotiators, mindful of Norway’s reliance on public control of public oil resources for the funding of its social infrastructure, sought to exclude (MAI, Definitions 2.b.9). This analysis was presented under the title of ‘The Multilateral Agreement on Investment: the Plan to Replace Responsible Government’ to the Interdisciplinary Conference on the Evolution of World Order: Building a Foundation of Peace in the Third Millennium, Toronto, June 7–9, 1997.
In 1950, the world caught 1,900 million tons of fish a year. In 1989, the catch was 89 million tons (Tim Radford, ‘Filled with More than a Grain of Truth’, Guardian Weekly, November 17, 1996, p. 19). Destruction of aquatic life not counted as fish stock is not included in these commercial counts.