On the cusp of geopolitical economic change

South News commentary Feb 7 2008

By Dave Muller

Climate change, Iraq war budget blowouts, financial meltdown in the developed world; 2008 is shaping up as a critical year. There is increasing nervousness about the supply and price of oil with the US/Israel threatening war with Iran. But crisis brings change and it is up to us the people to make this history our own.

Many people have drawn parallels between the later stages of the Vietnam war and the current state of play in the middle east. President Nixon in 1970 escalated the war to the rest of  Indo-China. But the war was draining the US financial reserves and on August 15 1971 announced that the United States would no longer convert dollars to gold at a fixed value, effectively ending the Bretton Woods system set up at the end World War 2. He also imposed a 90-day freeze on wages, prices and rents. No longer would the price of gold be officially valued at $US 35 an ounce. Today as Bush expands the money supply (M3) to save ailing banks and leveraged financial derivatives the price of gold is now well over $US 900 an ounce.

The crisis of 1971/72 led to geopolitical change in Australia and many other countries, shortly to be followed by the oil shock of 1973 which brought many economies to their knees. By the end of the 1970’s a shift of global power began with the growth in the Asian tiger economies and China’s rise to economic importance. Multinational companies transformed into transnational corporations with no particular allegiance to the imperial mother country.

And there was structural change in the very nature of monopoly capitalism.  Imperialism, rampant since 1914 when the imperial powers fought world wars to re-divide the world began to change. It is interesting that Britain ended the convertibility of Bank of England notes to gold in 1914 to fund military operations during World War I

But by the 1980’s no longer did banks and finance capital own or control the decreasing number of transnational corporations. Superannuation and pension funds began to become the new ultimate owner of these stocks. The 1990’s saw the privatisation of many state owned monopolies with this new investment capital seeking new markets for their funds.

In today’s global capitalism production is shifted from country to country to cut costs, but investment is more concerned with market share and preservation than short term profit. In a philosophical sense capitalism has reached its end. Yet it is an end where the ultimate end is more important than the means to that end.

We today have to insure we live in a sustainable world where the means (labour and their pensions) is the end (the ultimate consumers). But ultimately we need to put an end to the military-industrial complex which consumes its own production in destruction and waste.

"The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. Thus integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.

The capitalist mode of appropriation, the result of the capitalist mode of production, produces capitalist private property. This is the first negation of individual private property, as founded on the labor of the proprietor. But capitalist production begets, with the inexorability of a law of Nature, its own negation. It is the negation of negation. This does not re-establish private property for the producer, but gives him individual property based on the acquisition of the capitalist era: i.e., on co-operation and the possession in common of the land and of the means of production."

 Karl Marx Capital vol1 p.763

See also  Partners not Wage workers