Engineers thwarted by business men.

I’ve been rereading Thorstein Veblen. What a character he was. He came from a family of Norwegian immigrants living in Minnesota. He refused to say when he was born but we know he died in California in 1929. He studied at various American universities including Cornell and Yale and settled first at the University of Chicago to teach economics, economic history and related fields in the late 19th century. I’m not writing a biographical note here so if you want more details on the life of this amazingly intelligent but difficult man, just google his name.

The book that secured Veblen’s public notoriety and reputation is The Theory of the Leisure Class. It’s a compendium of commentary on the mores and institutions of the United States in the late 19th and early 20th centuries. It’s available free online. Once you become familiar with his unusual use of language, he makes for a very entertaining and enlightening read. His chapters Pecuniary Emulation, Conspicuous Consumption, Conspicuous Leisure, and Dress as an Expression of the Pecuniary Culture are a classic dissection of the institutions that affect us all daily. He lays bare where our wants, needs, desires, and dreams come from. His conclusion is that they come from our ‘pecuniary’ culture. Pecuniary means relating to or consisting of money. For Veblen, our money culture and it’s predominant ruling class of ‘captains of finance’ determine how we see and act in the world. They are the preeminent institutions of our world.*

Now, and finally addressing the title of this post, Veblen was particularly interested in parsing out the various components of the economic institutions that dominate our lives. In his book The Engineers and the Price System, available as a Kindle book, he argues that business men, particularly investment bankers and financiers in general, not your run-of-the-mill corner store operator, farmer, or forestry contractor, are constantly at odds with the engineers that actually run industry. For Veblen and most economists  business and industry are two separate things. We often conflate them today. In our world business dominates industry but it doesn’t have to be that way and, of course, it wasn’t always that way. In feudal Europe, the manorial lord drove industry, not the incipient mercantile class.

Industry, for Veblen, does not mean only the factory system and machine production, it means all the physical activities in which humans engage to produce what they need and want as well as the knowledge needed to do so. He concludes that in our world business finance curtails industrial production (particularly commodity production) as a means of increasing or maintaining profit levels. This is easily observable, but it seems strange to think this is true for some people.

For Veblen, profit making often requires the curtailment of supply. Producing as much and as fast as possible, efficiently and effectively, is the aim of engineering. This imperative constantly goes against the business need to make profit where curtailment of production can ensure prices remain high. These ideas, of course, are not revolutionary, and they are behind Canada’s supply management policies regarding poultry, eggs, milk, doctors, and lawyers.

For a good example of how engineers are thwarted by financial interests, one just has to look at how urban infrastructures are built and maintained. Let’s take Courtenay for example. It’s a smallish city on the east coast of Vancouver island, typical in every way. It has the requisite shopping malls, hospital, schools, service businesses and residential neighbourhoods. Now, the municipal government is made up of elected officials, management staff and workers. The elected officials represent pecuniary interests although they claim to represent all city residents. The management staff includes civil engineers, urban planners and the like. If decisions about where to build streets, what they would look like, the materials used in their construction, etc., were left to the engineers, the city would look entirely different than it does. The monetary interests constantly impose cost restrictions on the engineers with the result that street design, urban planning and related activities, are a hodgepodge of compromise including irritating merge lanes and intersections, inadequate bridge structures and neglected maintenance that leaves many roads a hazard to drive on. However we think about it, engineers are systematically constrained by the vested interests represented by elected officials. Of course, not all elected officials see themselves as representing the vested financial interests, but if they didn’t follow the policies imposed on them by the provincial government with regard to fiscal ‘responsibility’, they would soon be removed from office. And, of course, there must be some oversight of the work of the engineers. The point Veblen makes is that the oversight is the prerogative of business interests in the name of maximizing profit, and not for creating the greatest good for the greatest number of people, in this case, the residents of Courtenay.

By the way, Veblen is off the mark when it comes to the role of engineers in a potential overthrow of the ‘kept classes’, but he wasn’t beyond speculating on the way the pecuniary culture would come to an end. I have to reread his book Imperial Germany to determine what his views are on globalization, but that’s my next Veblen read. Karl Marx was very conscious of globalization and, for him, the end of the capitalist domination of industry and production was predicated on the advanced globalization of capital accumulation. Veblen wrote extensively about Marx and admired his materialist historical method. He did have reservations about Marx’s work, but that will be for another blog post.

 

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For Veblen institution means a ‘crystallized’ habit of thought or life, crystallized meaning that they are spread throughout society so as to be essentially unquestioned by most people.

The “Canadian Economy?”

Following my last post where I look at Statistic Canada’s analysis of intergenerational income in Canada without coming to any conclusions, today, I intend to make one specific point. That point also relates to a Statistics Canada post today on labour productivity in Canada.

http://www.statcan.gc.ca/daily-quotidien/161202/dq161202b-eng.htm

The point I want to make has already been make frequently enough. Harold Innis, the pre-eminent political economist who worked at the University of Toronto and who died in 1952 and his mentor and predecessor, Thorstein Veblen, the even more pre-eminent economic historian who taught in various American universities and who died in 1929 both in their own ways decried the use of statistics on a purely national basis. The transnational nature of corporate power and control has been studied carefully by scores of scholars over the decades. See in particular the work of William Carroll at UVic and the network of scholars with whom he is associated worldwide. In my own dissertation (1981) I argued following Innis that the weather doesn’t stop at national borders, nor should statistical analysis.

In an age where corporations are spread all over the globe and where a head office may be in one country, research and development in a couple of others and commodity production in several others, how does it make sense to talk about the ‘Canadian’ economy? If StatsCan wants to get with the times it needs to begin to follow corporations in the various parts of their businesses wherever they happen to be. It’s telling that the former Canadian Manufacturers’ Association is now the Canadian Manufacturers’ and Exporters Association. With the massive reductions in value-added production in Canada over the past half century, the concept of ‘Canadian’ manufacturing is losing its relevance. This is even more true when we consider that the extractive industries in Canada, especially in the petroleum industries are 95% under foreign control.

There is no such thing as the Canadian economy. The sooner we accept that and change our patterns of gathering data the sooner we will get an accurate picture of the global reality of ‘the economy.’ Of course Statistics Canada is there to serve the Canadian government so it’s by it’s very nature political. Harold Innis warned decades ago that scholars should not let politicians lead them around by the nose. It seems like that’s exactly what has happened for a long time now and is still the driving force of data collection in StatsCan.

I deal with this topic in several posts. Check my archives for more.

Why do 99% of movies follow the same formula?

Why do 99% of movies follow the same formula?

Because they address our most basic anxieties, our fear of death and our drive to deny it.  Denial of death is what I call a meta-institution. That means an institution (defined by Veblen as a crystallized habit of thought or life) that is globally dominant and pervasive. No place, country, society, culture or whatever group is immune.  We all create and nurture death-denying institutions. Sometimes they involve religion, sometimes not. Business is as good at death denial as religion is. There is no way that the film industry can escape our basic drive to deny death.

Death doesn’t necessarily mean what happens to you when your brain and body stop functioning. It can mean poverty or social death and isolation. In this sense death denies us the good life but leaves us, zombie-like, to live out our physical lives with not much of anything interesting to experience or for which to look forward.

The film industry barters in death, social or physical, worldly or eternal. So, you’ll often see a person die in movies but generally that’s considered a sacrifice for the survival of our favourite death-denying meta-institution, the one that promises us eternal life of one kind or another. The hero, that person or group that personifies the triumph over death, occasionally dies in a movie, but always with the proviso that what they’ve fought and died for lives on. From war movies to romantic comedies, the formula is always the same as is the outcome. Of course there is a lot of variation in how the formula plays out and how long an individual movie spends on any particular part of the formula, but that doesn’t negate the existence of the formula itself.

Triumph over complacency, attack from various quarters (earthly or otherwise), disease, rejection, isolation, poverty, or what-have-you, is the bread and butter of the film industry.

The power of what we think is true or: Marx was a dumbass, everybody knows that! With a commentary by Paul Whyte, political scientist and former colleague.

-This is a blog post which appeared here on November 17th, 2015. A former colleague at NIC, political scientist Paul Whyte, wrote a response to the post below but for some technical reason was unable to leave a commentary. I respect his knowledge of Marx and his capacities as a teacher so I’ve decided to repost my November 17th post with his comments in tow. 

Please read his comment if nothing else. They follow my post. 

 

I write. I used to teach. I suppose that in some individual cases I may have even convinced a few people to change their minds about the way they perceived the world. Mostly my efforts are and were in vain.

Our dominant ideologies around possessive individualism, the nature of countries and what we value in life are so powerful as to frustrate and flummox the efforts of the most competent of teachers to get people to change their minds about anything.

I’ve changed my mind a number of times in my life but generally in line with added knowledge gained from reading and researching writers and authors who compelled me to see beyond what I had previously accepted as true. I came to understand fairly early in my career that there is no absolute truth, only tentative truth which must be abandoned when confronted with superior ways of explaining things.

For the first few years of my career as a sociologist I was a Marxist through and through. That early dedication to Marx’s work was soon tempered in many ways by the works of Harold Innis, Thorstein Veblen, Emile Durkheim, Sigmund Freud, Thomas Szasz, R. D. Laing, Erving Goffman, Ernest Becker, Otto Rank and many others. It’s been a ride. Although I’ve gone beyond Marx in many ways, I still often come back to one of Marx’s aphorisms about history in which he said (and I paraphrase): Human history will begin when we stop being so barbaric towards one another.

He was an optimist who actually believed that this would come to pass with the eventual eclipse of class society, a time in which there would no longer be any reason to kill and exploit because of the rise of technology and the elimination of labour exploitation.

Faced with the litany of accounts of death and destruction perpetrated by groups of people over the face of the earth going back millenia and it becomes difficult to accept Marx’s promise. I also being an optimist agree for the most part with Marx on this especially given globalization, the concentration of capital, the erosion of national sovereignty and the degradation of the natural world. These aren’t particularly uplifting processes for me, but they all point to a time in the future where capital will do itself in by increasingly attenuating the profit margin.

Strangely, I write this knowing full well that the vast majority of people who on the off chance might read this will not have read Marx and will have no idea of what I’m writing about here. People are generally quick to dismiss ideas that don’t agree with their preconceived notions about things. That’s certainly true when it comes to Marx’s work. People can easily dismiss Marx (and most other fine writers in history) by thinking they know what Marx (and most other fine writers in history) argued and can therefore cheerfully scrub him (and the others) from their minds. Or they think of themselves as anti this or that, in Marx’s case ‘anti communist’ so that anything that Marx argued just cannot be ok. Mind shut, let no light enter.

One of Marx’s most important ideas was that the division of society into classes would inevitably be relegated to the dustbin of history and along with it barbarism of all kinds. I like that idea, but ‘inevitably’ in this context will probably still be some time in the future. There’s plenty of time left for ignorant, highly suggestible “cheerful robots” (a term from C. Wright Mills) to commit mass murder or other kinds of atrocities in the name of eliminating the evil that they feel is blocking their prosperity or their road to heaven.

Probably the most influential writer for me over the last 40 years of my career has been Ernest Becker.  His little book Escape From Evil published in 1975 after his untimely death in 1974 of cancer at the age of 49, has most profoundly influenced my way of thinking and seeing the world. Escape from Evil, in my mind contains all the knowledge one would ever need to explain the bloody massacre in Paris on November 13th or all the other atrocities ever committed by us towards others and vice-versa over the last 10,000 years, or for the time of recorded history, and probably even further back. It’s all there for anyone to read. But people won’t read it and even if they do, they will read it with bias or prejudice and will be able to dismiss it like they dismiss everything else that doesn’t accord with their ideology or interests. And there’s the rub.

It’s people’s interests rather than their ideas that drive their capacity to change their minds. Change the way people live and you just may change the way they think. It doesn’t work very well the other way around.

Given Marx’s long term view on barbarism and senseless violence we cannot hope for much in the short term. We just have to wait it out. Of course our actions speak louder than our words, so within the bounds of legality, it’s not a bad idea in my mind to oppose talk that can incite some unbalanced people among us to violent action. It’s also a good idea to support peaceful solutions to conflict rather than pull out the guns at the first sign of trouble. Violence can easily invite violence in retaliation. We can resist that. It’s tough when all we want to do is smack people for being so ignorant and senselessly violent, but we can forgive rather than fight, tough as that may be. Turn the other cheek as some historical figure may have said at one point a couple of millenia ago.

Paul Whyte’s comment:

We will be severely challenged in the years to come to keep our heads as globalization increasingly devalues our labour and the concentration of wealth makes for more and more poverty. Sometime, somewhere we will have to say enough is enough and mean it in spite of the forces trying to divide us. We can regain our humanity even though it’s tattered and in shreds at the moment. It’s either that or we won’t have much of a future on this planet.

I too taught – actually alongside you for close to 30 years! Our disciplines were different [mine were Political Science and Introductory (Western) Philosophy] but shared a common past and crisscrossed each others field of expertise. We were, and still are, passionate about knowledge and driven to explore and share with others, primarily students and colleagues while working, but quite frankly anyone who so much as feigned an interest in the things that captivated us. I write also -surprise, surprise! [cheap seque to invite you to check out my new blog site at paulswhyte.com]. Whether our individual efforts prove to be in vain is really for others to judge and regardless of the answer, we/I must admit we were driven to it and not for any accounting of the number of ‘conversions’ we made [and not even for the fame and fortune!].

   “Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brains of the living.” K.Marx

It is true to acknowledge the existence of a dominant ideology within society, but freedom of thought arises from the critical analysis of those underlying oftentimes philosophical thoughts and values, questioning their truth especially within a historical framework. History is littered with ‘dominant’ ideologies that were transformed and/or deposed. It may also be true for example as you state “that there is no absolute truth” but that itself is a historically contingent claim. Our inability [to date] to assert ‘an absolute truth’ does not necessarily negate its existence, but simply denotes only our present limitations to human knowledge.

The trajectories of our academic careers are remarkably similar. My early exposure to the writings of Marx, limited like every other English-speaking student/scholar of our generation by the sheer lack of translations of much of his work into English (now it is all available) was nevertheless profound and revelatory. My appetite became voracious leading me to graduate schools in the UK and a lengthy dissertation on Marx’s theory of revolution and the SDF in late 19th c. British politics.

I concur wholeheartedly with your statement about the gains that accrue from a lifelong practice of reading and research. The list of authors whose paths I have crossed now seems legion. Has my earlier career’s affection, and more importantly, affiliation to the Marxist viewpoint wavered – yes many times; altered – not fundamentally; been abandoned – never. Marx’s detailed and nuanced historical materialist conception, particularly as applied to industrial capitalism, seems more accurate today (as you say) in the expansion of globalization and the widening income inequality gap.

I likewise see Marx as an optimist about the unfolding of human history. The class struggle is at the very core of his theory and ‘projections’ about its “inevitable” disappearance [in a future communist society] still strike me as essentially correct. Where I think I depart from you, and many others as well, is in the hope or assertion that such a transformation can ultimately be achieved by peaceful and democratic means. Greater “participatory democracy” might be an advance on the current situation, but I am reminded of the earlier hope placed in the trade union movement to significantly change the overall conditions of the many in a capitalist economy, and we both know how that has turned out.

You are right to state that peoples’ material interests are foundational, and consequentially that their ideas are forged within the context of their particular class affiliation. Most are blinded/hoodwinked from this truism by a dominant ideological lens, representing as Marx said

  “The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling    material force of society, is at the same time its ruling intellectual force. The class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it.” [German Ideology]

This creates for our time promotion of the merits of possessive individualism and the fruits of capitalist accumulation. 

Take courage and write/speak on because as one of Canada’s greatest contemporary troubadours [Bruce Cockburn] said so eloquently, “but nothing worth having comes without some kind of fight, got to kick at the darkness ’til it bleeds daylight”.

Does big business serve us or do we serve big business?

Thorstein Veblen, the controversial American economic historian and philosopher who died in 1929, just before the Great Depression, understood the capitalist mode of production better than most.  He wrote extensively on Karl Marx’s work (in The Place of Science in Modern Civilization) and found it to be internally logical but based on the moral premise that workers deserve to receive the full value for their participation in the productive process.  According to Veblen’s interpretation of Marx, work is a social activity but the output of that activity is appropriated privately.  We know that workers do not receive the full benefit of their participation in the work process, their employers pay them only part of the value workers create.  Otherwise, surplus value and profit could not be possible.

Just as a quick aside, Marx understood that workers did not share in the value they produced except in the receipt of wages, a value pre-determined in the productive process by and large.  Workers sell their labour-power (that is, their capacity to work) to the capitalist in the labour market. A capitalist has to have all the elements of productive capacity in place before production begins and that includes labour. So, labour is part of the cost of production determined before production can begin.

It’s interesting how screwed up we are about our place in the world, particularly around our role in the productive process.  So, business evolved historically as a means to satisfy certain human needs and wants.  It’s a method by which production and distribution are organized.  Ironically, as business capital came to dominate industry more and more, we, as members of societies in our capacities as productive beings, came to serve business rather than the other way around.  Of course, we have the idea that we all live as citizens in democratic society, free to move around from employer to employer if we want.  In other words, we have the illusion of having some control of our lives, but that’s just what it is, an illusion.  The fact is that we are supposed to be served by business but we are essentially the servants of, and work at the whim of, business.  The world has been stood on its head.  Make no mistake about it though, business cannot exist unless we offer ourselves up as workers to it in the labour market. (I’ll deal with public sector work and small business in the next post.)  We are workers, citizens and consumers but it is our role as worker that is the most important in our world.

Business is becoming more and more global in scope and reach.  With some exceptions it used to be that businesses hired workers locally for local production and distribution and for local consumption.  That all changed starting in the 15th Century but the 19th Century was when this movement increased dramatically.  Workers in the Canadian forest industry (employed by British companies) produced timber for British manufacturing plants and to build tall ships. Later workers in BC produced lumber predominantly for the American housing market.  In truth, Canada has always been a source of raw materials intended for processing elsewhere as much as possible.  That’s not entirely true, but as a basic thrust and overall aim, it is accurate.

In the 1920s the British Empire was losing power over its colonies including Canada while the United States was growing stronger and more influential on a global scale.  In that period of time, the Canadian government succeeded in negotiating the Auto Pact with the US whereby cars sold in Canada must be made in Canada.  Since that time, the US has been on a mission to erode those early gains by Canadian workers, and the Auto Pact has been unravelling for at least a couple of decades now helped along, I may add, by free trade agreements.

This is all to argue that business, and us as workers, used to live primarily under the banner of citizenship.  It made sense to think of Canadian business and American corporations.  (This is also true for union, by the way)  That’s no longer true for the largest global corporations.  More than ever, capital dominates industry and production on a global scale but it still has certain national ties that make it seem as though it serves national interests, including those of ordinary citizens.  That is no longer true and is getting to be a more and more dangerous illusion.

The seemingly miraculous rise of China as a global economic power must be understood as arising from a massive shift of capital by Canadian, American and European business to productive capacity on (for example) Chinese soil in factories using cheap labour.  “Canadian” business has no loyalty at all to Canadian workers.  That’s clear.  Its business logic and primary mission is to accumulate capital.  If that means shutting down factories in Oshawa, Windsor, Hamilton and Montreal and opening them in export processing zones in China or by creating “Chinese” contractors to manufacture consumer goods, so be it.  Now, work is also becoming obviously global with the shift of manufacturing capacity to China (and other countries like India, Sri Lanka, Viet Nam, etc.) and the rise of the new class of ‘temporary’ workers in Canada.  Things are shifting all over the place.  It’s hard to keep track of it.

The problem with modern capitalism is that it’s completely anarchistic.  There’s nobody in charge.  Corporations are all in it for themselves and countries are becoming increasingly powerless to do any planning that does not put corporate profits first, that is, if they were ever  really interested in doing so in the first place.  Citizenship counts for very little anymore in a world where corporations like Monsanto, Nestlé’s and Exxon call the shots and politicians serve them in any and every way they can.  This includes looking hard to find every way possible to  shift wealth from public to private hands including public-private partnerships (P3s) and the systematic dismantling of government services and their replacement with private contractors doing the same work.

To use a business metaphor, the bottom line is that we are in the throes of a massive shift in the global distribution of capital and labour.  For the foreseeable future, it doesn’t look good for us as workers or as consumers.  As we lose our jobs we will not be able to afford the products produced in China by corporations based in North America, Europe and Australia, even if they are getting relatively cheaper and cheaper.  That can’t be good for businesses that rely on us buying their products made in China but they aren’t going to change the way they do business because they are caught in the treadmill of needing more and more profit and accumulated capital in order to survive.  And they’ll do anything to survive including encouraging global fascism while dismantling democratic institutions (what’s left of them)  as a means of ensuring the ongoing concentration of capital in fewer and fewer hands, while pushing harder than ever using advertizing to convince us to spend, be individualistic, mistrust government, oppose taxation, and ‘get ahead’ by ‘working hard’.

How Higher Education in the US Was Destroyed in 5 Basic Steps | Alternet

How Higher Education in the US Was Destroyed in 5 Basic Steps | Alternet.

Predicable.  The author Debra Leigh Scott doesn’t mention Thorstein Veblen’s essay The Higher Learning in America published some 100 years ago but he noted then how business was taking over higher education.

Pure science is under attack everywhere, a consequence of the decline of the importance of the national state and the rise of global corporate power.  It’s anarchy out there.  Corporations don’t want to spend a dime more than they need to in order to make megaprofits so they want ‘science’ that is strictly geared to their needs.  Countries (meaning you and I) are left with supporting pure science with the uncertain knowledge that it will benefit them in any practical way.  States still do support pure science in many forms, but the pressure is on the increased importance of ‘applied’ science…which is really engineering.

Gwynne Dyer – A review of a recent talk: a lot right, some not so much.

Gwynne Dyer – A review of a recent talk: a lot right, some not so much.

 

Gwynne Dyer (http://gwynnedyer.com/) spoke recently at North Island College as part of the Institute of War & Peace being taught over the spring term by three faculty members from the English and Humanities and Social Sciences Department.  This is the third time I’ve heard Dyer speak and on every occasion he has demonstrated an uncanny ability to go on for an hour and a half without notes or even the benefit of a power point presentation.  Astounding!  But he is a compelling speaker.  When I was still teaching sociology at the college I often used Dyer’s films in my classes, one on the experience of Marine basic training on Parris Island, South Carolina and another great one on the ‘tribe’ as an organizing social and political force.  Dyer is an intelligent reporter and critic on world affairs, especially those with military dimensions.

 

In his recent talk at the college he covered three areas of ‘current unrest’ in the world, the Middle East, the Ukraine and the South China Sea.  His analyses often seem counterintuitive as one listens to them yet strangely plausible at the same time.

 

With reference to the Middle East, Dyer argues that there has been no major war to disrupt the area for quite some time.  He goes over the power and potential of the major states in the area, Syria, Lebanon, Jordan, Iran and Iraq, but also of Egypt, to win a war with Israel.  He concludes that all out war between Israel and any one of those Arab states is highly unlikely.  Of course, the tension always seems to be there and there have been the odd military excursions here and there and punishing attacks by the Israelis in Gaza in ‘retaliation’ for Palestinian attacks like the wave of bus bombings in Jerusalem a few years ago.  The West Bank is slowly being overrun with Jewish settlements.  So what would be a viable solution to the ‘crisis’ if one were a Palestinian?  Well, the two state solution seems plausible with Israel taking the bulk of the territory but with the Palestinians at least holding on to some territory over which they would have sovereignty.  A better solution, still, Dyer proposes, might be a one state solution where Israel would cover the whole area from the Egypt to Lebanon and everyone would become a citizen of one country, Israel, whether Jewish or Palestinian.  Because of the demographics of the situation, and if the Palestinians had the vote which would be their right as citizens of Israel, power could realistically devolve to the Palestinians in a reasonable period of time.  Apparently, this scenario is gaining ground as a possibility among Palestinians but the impediments to such a solution are not easily discounted.  Plausible…as they would say on Mythbusters, but probably a long shot.

 

Dyer’s comments about the Ukraine are less optimistic than are his thoughts on the Middle East.  He sees a lot of outright stupidity and bravado there but he is cautiously optimistic that war will be averted as long as Western countries keep their noses out of it but that the tension could very well devolve into something more serious than a skirmish.  Dyer is much more knowledgeable about the situation than I am.  I freely admit that I know very little about the politics of that area of the world, but I still feel there is something lacking in Dyer’s analysis, a feeling I get from my general knowledge of the global political economy over the past few centuries, particularly since the first serious wave of the spread of European capital to other parts of the world in the 15th Century. (let’s not quibble about the Roman empire).  Back to that later.

 

Dyer ended his talk with a note on the South China Sea where China and Viet Nam are now in a dispute about the ownership of some islands that coincidentally are on top of substantial oil reserves.  We know from the news that Chinese nationals are being attacked by Vietnamese in Hanoi and other cities causing thousands of Chinese to return in haste to China. Dyer also talked about longstanding disputes between Japan and Korea over islands (of course).  His main point in his talk about the South China disputes is that China is headed into a deep recession.  Its in need of a diversion so that its citizens are focused on an external ‘threat’ thus inflaming an always present but sometimes dormant nationalism.  For the Chinese leaders this is a much better outcome than having China’s workers brooding on the fact that their jobs have disappeared and having them get revolting over that. There’s already enough unrest in Chinese factories with workers demanding pay increases and better working conditions.  Don’t need any more of that!   I don’t believe I’ve misinterpreted Dyer in any of this but I’m open to be corrected if need be.  That said, I left Dyer’s talk last week a little dissatisfied.

 

Dyer, being a specialist in military and political history, can be forgiven for not integrating political economy into his analysis more completely.  In reference to some situation in the Ukraine that I can’t recall at the moment, although it may have had something to do with the sad state of productive capacity and outmoded means of production and competition from other jurisdictions, he made an offhanded remark that ‘well, that’s just business.’  Well, business, especially at the scale we’re concerned with here, is never just business.  When Dyer mentions that a coming recession in China is driving foreign policy he’s getting it, sort of, but not essentially.

 

I want to step back here for a moment and consider why there has been no major military battles in the last 70 years on this favourite planet of ours.  It could be argued, I suppose, that assured mutual destruction may have something to do with it.  Launching nuclear weapons is a no-win game and everybody knows it.  That doesn’t mean that some nut job in the Pentagon or the Kremlin hasn’t thought about it.  So far more rational heads have prevailed.  Let’s hope it stays that way.

 

I believe, however, that the main reason for the fact that bombs aren’t flying between major powers in the world today is much more about the fact that countries are not really the drivers of economic activity, multinational corporations are.  I know not everyone agrees with me on this, but from my reading of European history, the driver of the formation, configuration and constitution of countries (states) from as far back as the 14th Century is capital expansion.  In the Middle Ages the acquisition of land, often violently but mainly by treaty and intermarriage, was the way wealth and power were accumulated.  After all, it was the prospect of new territory that prompted Queen Isabella of Spain to bankroll Christopher Columbus on his little jaunt into the Atlantic Ocean.  Columbus himself didn’t care a hoot about territory. He was interested in ‘stuff’ he could bring back from India or wherever he landed to sell on the European market to make himself rich.  For his class of people, the bourgeoisie, commodities, not the conquest of land were the source of wealth.  That’s still the way it is today although today we’ve come to a time when the world is becoming highly integrated in economic terms.  Companies with head offices the whereabouts of which matter very little anymore, produce (or contract other local businesses to produce) goods in export processing zones all over the world.  They then move them to ‘consumer’ markets mostly in Europe and North America, but increasingly to every corner of the planet by just-in-time processes of distribution.  In whatever country a corporation has a head office (usually just because it first saw the light of day there) it’s likely to lobby hard and get the support of the national government to champion its interests even though those interests may clash with those of the citizens of said country.  The larger the corporation the less likely the national government is to ignore it.  And if, as with the petrochemical or auto industries, a number of corporations lobby hard through their non-profit lobbying societies like the Canadian Petroleum Producers Association, then the government takes the call no matter what time of the day or night.

 

In fact, with a few exceptions, the governments of our world are all too eager to serve corporate interests to the detriment of those of its own citizens.  A recent article in The New Republic suggests that a number of ‘American’[1] corporations are already whining about how economic sanctions against Russia would be sanctions against them because they do billions of dollars of business a year in Russia and have high hopes for Russia as an emerging market for US goods (some produced, no doubt, in China). There are Pepsi and Coca-Cola signs all over Moscow. (Vinnik 2014)  Now this has a critical impact on the likelihood of open interstate warfare, especially where nuclear weapons are concerned.  It’s really not about territorial expansion anymore, anyway.  It’s about control of commodity markets, including those for cheap labour power.  Particularly strange would be for the US to decide to attack China with bombs.  It’s true that if Walmart were a country it would be China’s 8th most important trading partner.  I can’t imagine Washington attacking Walmart’s factories in China!

 

In fact, in a perverse kind of weird way, I think that the fact that corporations, in looking for the cheapest sources of labour and raw materials, spread themselves all over the globe is a deterrent to all-out war between states.  Of course the fear of war is important because that justifies feeding billions of dollars into arms producing businesses.  But skirmishes here and there use up some of that arms production as do military exercises like patrolling the South China Sea, something the American Navy has done since 1945.  Still, an American government aiming to protect ‘its’ corporations is not likely to send in the troops when that would lead to dropping corporate profits.  Nowadays, war is not always good for business and its clearer now than ever that corporate interests come first in our world.  I hate to admit it, but corporate global expansion may be a strong deterrent to interstate warfare. (Vinnik 2014)

Works Cited

Vinnik, Danny. These U.S. Corporations Are Probably Scared of Sanctions on Russia. March 4, 2014. http://www.newrepublic.com/article/116853/economic-sanctions-would-hurt-american-companies-russia.

 

 

 

 

[1] Corporations are considered legal individuals in the US and in Canada but it’s a stretch to think of them as ‘national’ when capital supercedes state in the way the world is organized these days according to Thorstein Veblen and other commentators for whom I have a great deal of respect.  Although the relationships are complicated, it’s more accurate to say that capital created the modern nation-state than the other way around.