New American Civil War?

I’m sitting here pretty much incapacitated by some undetermined health issues, anticipating yet another doctor’s appointment tomorrow to go over yet another set of lab results, and trying to distract myself from too much inward looking self-pity. At least I can still write. The brain fog I’m experiencing makes it somewhat more difficult than in the past, but I can still do it, especially if I write about something I have some passing knowledge of.

A new American Civil War? Perhaps. The first American Civil War in the 1860s was fought by agricultural capitalists in the South against industrial capitalists in the North but it was couched in state-based rhetoric: Northern states versus Southern states. During the war, there was less emphasis on the economic interests than on slavery, ‘freedom’, and the need for a ‘United’ States. Capitalism can tolerate slavery to some extent, but it really needs a labour force that is also a consumer force. Slavery is incompatible with a growing need for mass consumption. Of course the first American Civil War was fought using non-economic rhetoric and propaganda but the underlying logic of the war was economic and political. Contemporary Confederate flag wavers are not focussed on economic, but on some imagined lost ‘freedom’, and Southern solidarity: Us hard-done-by-Southerners versus You overbearing, holier-than-thou Northerners. The longevity and sustainability of Southern feelings of oppression by the North should tell us something about the depth of feeling in the US now. Looking at a map of the US featuring red and blue states illustrates that there are still glaring geographical differences in people’s attitudes and in their political loyalties. The Southern states, now including Texas, are still feeling hard-done-by. (Some of the northern mid-American agricultural/rural states likewise). Visiting Texas it’s clear that there is an underlying uneasiness and separatist impulses have not completely dissolved. I haven’t visited Idaho, Wyoming or Montana, but rural, agricultural areas are clearly alienated from New York and California. It may be the United States of America, but it’s not the Solidarity States of America. Internecine squabbles and jealousies abound.

The Second American Civil War may well have a rhetorical veneer of statism and rage (yes, rage) over perceived (and sometimes real) social and economic inequalities, but if Donald Trump is successful, it will be a moral war, one fought by people who have fully absorbed the moral imperatives of the capitalist promise of free enterprise (while hardly benefitting from it personally) against people they perceive to have abandoned American ‘freedom’ and ‘liberty’. The move to impeach Trump will only further solidify the camps, but Trump has not given the Democrats many options. I’ve recently read a number of articles in the New Republic and in other publications that argue that the way to combat Trumpism is not to call out Trump supporters as stupid, ignorant morons, but to engage in dialogue and community building with them so as to understand their grievances and support them in coming to a more reasoned assessment of the issues. I’m not sure there’s time for that.

Trump will continue to inflame passions with his frequent Tweet storms and rallies, accusing high level policy makers of treason and high crimes. How long can this go on? How long will it be before we see a convoy of Mad Max wannabes rampaging through the streets of America’s major cities randomly shooting people, raping and pillaging? How long will it be after the initial skirmishes and outburst will be see anti-Trump militias grow in defence of their families and communities? What of the police? Will they serve the American Constitution against concerted attacks on democracy from all sides? Will they be peacemakers or will they take sides? And what of the military? Will the military take sides? Would the military support Trump if he decided not to vacate the White House after a narrow electoral defeat in 2020?

It’s dreadful to even think about possible scenarios of violence, lawlessness, and totalitarianism but to not think about them is irresponsible.

I’m a Canadian. As Pierre Trudeau said decades ago, we are a mouse sleeping next to an elephant. Woe be the moment when the elephant rolls over in his sleep. For Canadians there is no isolation from American extremism. Over 80% of us live within a hundred miles of the American border. We have family and friends in the US. We worry about their safety and security.

I am a retired college teacher. I told my students decades ago that America was headed for a civil war. The tensions caused by American corporations creating global markets and (at least for the moment) eliminating good paying jobs in manufacturing to exploit cheap labour in Asia, Africa and South and Central America, were bound to lead to widespread social unrest, nationalism and jingoism. I don’t think that global supply chains and markets are going to be easily dissuaded by Trump. They continue to create subsidiaries and engage contractors in China, India and elsewhere. North American manufacturers continue to expand their supply chains and are not interested in containing their activities to US territory nor would they be interested in repatriating manufacturing. I can’t imagine Nike returning to Oregon to manufacture its products. It has no capacity to do so in the US and it would be prohibitively expensive to build new factories in Beaverton, Oregon, the site of its headquarters. There are some agricultural corporations that are moving their processing facilities from Canada to the US in a move, in part, to placate Trump supporters, but they still need Canadian raw materials. The complexity of global capitalism is staggering and strangely enough, that is what gives me any hope at all that a second American Civil War can be avoided. Many US manufacturing corporations that keep research and development functions in the US but produce their commodities everywhere else on the globe are pushing back against Trump’s tariffs. For example, iPhones are made in several places, mostly in China (check out FoxxCon) but may also be made in India shortly. US tariffs will force the price of iPhones upwards, but that’s true for many so-called American products made in China and elsewhere. The world is now so economically intertwined and interconnected that starting a war with China, say, means crushing America’s own manufacturing and processing capacity. I’m hoping that America’s business leaders will have the guts to seriously oppose Trump. I’m not sure that will happen and they may just try to wait him out. I’m unconvinced, however, that any business opposition to Trump will be able to coalesce sufficiently to help ease tensions in the US domestically.

The picture is much more complex than I’ve presented it here, and I may be a victim, like many others, of hyped up, sensationalist news. However, I perceived, like others, this trend in America for decades, before social media, fake news and the gutting of the CBC and other formerly independent news sources. I read widely and I search out different points of view. Trump supporters are caught up in a cult-like mindset unencumbered by reason and will not easily be dissuaded even if dire predictions of the imminent collapse of America do not come to pass. Sadly, some extreme lefties are caught up in the idea that all Trump supporters are ignorant, stupid slobs. There isn’t much room for moderation, reconciliation, or peace in this extremism. Is it possible for the political ‘middle’ to assert itself and put a stop to all forms of extremism? If so, how would that happen? If not, where do we go from here?

Trump plays silly buggers with trade.

It’s hard not to think of Trump as either silly or cynical.  His economic nationalism is skating on very thin ice and is impossible given the current state of capitalist industry and finance in the world today. Trump should know that capital has long considered national borders as an inconvenience, an opportunity to make more capital, but certainly not as impenetrable walls. His own campaign material was printed in China. His ‘Make America Great Again’ hats were made in China. What the hell is he thinking? It may be that he doesn’t care a wit about any of this because nationalism and flag waving are big sellers in the US. If enough Americans buy into his strategy, if in fact he has one, he can safely ignore his anti-globalist stance in practice and get on with making more money for himself and his cronies. He promised Appalachia that coal would return. It won’t. Empty promises don’t matter, it seems. China and Canada are mean and unfair to poor little USA. ‘Yes! That’s right!’ shout his acolytes. Blame others, that’s it. The people will lap it up. As long as people believe him, Trump feels safe. That would make him the consummate cynic. Do you buy into the idea that Trump knows exactly what he’s doing? His popularity is slowly waning however so he had better watch his ass. Now that I’ve got that off my chest, I want to repeat here what I’ve written before, at least in its essence, elsewhere in this blog (among other places). Yes, I will be repetitious in this post, but only because sometimes repeating a message over and over again is the only way to get through to some people. Of course the people I would like to convince to look more deeply into Trump’s politics are not likely to read this blog. Research, science and thoughtful criticism are not where they turn to for ideas on current political affairs. Belief is enough for them, heart and feeling trump brain. Because Trump is so high on America First, I want to outline some ideas that have been kicking around for centuries about the relationship between countries and capital. Where do American corporations fit into Trump’s world of international trade? Where do international industrial practices, just in time production, export processing zones and globalist production, distribution and consumption fit in Trump’s world? Who knows? However, I don’t think it matters much because capital is bigger than Trump and bigger than the American political system. Capital will eventually eclipse all politics and we’ll be left with who knows what. That may be the end of our tenure on this planet. I have no idea. The problem is that we are such a species full of contradictions. We can do amazingly wonderful things then in the blink of an eye turn into murderous butchers. But back to my point. There is a ton of books that have been published in the 19th, 20th and now in the 21st century about the relationship between countries and capital, but they haven’t seemed to have convinced most people that countries are no longer the repositories of capital and haven’t been for a couple of centuries. Most of the books and scholarly articles I’ve read, and I’ve read dozens on this subject, are clear that capital has long since eclipsed countries as the seat of political economic power. Barnet and Muller in their book Global Reach: The Power of Multinational Corporations from 1976, the year I entered graduate school, argue that of the 100 most powerful economic entities on the planet, 49 of them were multinational corporations (MNCs). I’m sure that ratio is now even more skewed towards MNCs than it was then. I suggested earlier in this post that I was about to write about capital, so what am I doing writing about multinational corporations? Well, MNCs are the seat of capital, the embodiment of what capital means and stands for. They are the crystallization of capital, the vehicles for the generation, circulation and consumption of capital and ultimately its concentration. It might be informative at this stage to define what I mean by capital. I’m not going to do that except to say that capital is the means of creating and re-creating wealth although people commonly equate capital with money. Actually, Marx defined capital in the 1860s with his book, Capital. If you want to understand capital, read Marx, then read some more. A recent book by Thomas Piketty (2017) called Capital in the Twenty-First Century, takes up Marx’s challenge and does a fair job of it. His argument carries on where Marx left off. He clearly documents how capital has become increasingly concentrated in the hands of just a few corporations and individuals (the 1%) over the past three centuries. It’s been a slow but inexorable process. I’ve already argued in this blog on several posts that countries were a creation of capital to start with. ‘Modern’ capital was initially dominated by merchant capital, think Christopher Columbus, (starting in the 11th Century and even before), was replaced eventually in the mid 18th Century by industrial capital, think Wedgwood, then in the late 19th Century by finance capital, now, of course, think Rothschild and Goldman Sachs. That doesn’t mean that all forms of capital haven’t survived, it just means that the dominant form of capital has changed over the decades. In the face of the persistent and overwhelming power of capital, countries went from being somewhat independent political entities with more or less functioning economies to essentially servants of capital and managers of the working class. It didn’t happen overnight. It’s a process not an event. As Harold Innis (1894-1952), a political economist and professor at the University of Toronto, wrote in the 1940s, politicians rely on national statistics to support their power. The Canadian government collects national statistics and ostensibly relies on them to make political decisions. Stephen Harper did not like Statistics Canada because it often reported in ways he did not approve of. Innis knew that national statistics were often a sham and he said so. Think of this possible scenario: General Motors sends a car it assembled in Oshawa to Michigan. Stats Can considers this a transaction that needs to be reported under the heading: international trade. Or this: Canada’s petrochemical industry is overwhelmingly owned by American companies. They ship their product along their pipelines from Canada (Alberta) to the US for refining. That is international trade. It strikes me that if we want to get a grip on how ‘our’ economy works we need to abandon our traditional way of collecting statistics or we must at least map out how large multinational corporations do business across borders. William Carroll at the University of Victoria studies international supply chains. His work is illuminating, but the situation is changing so rapidly it’s hard to keep up. According to the Office of the United States Trade Representative:
  • U.S. goods imports from China totaled $505.5 billion in 2017, up 9.3% ($42.9 billion) from 2016, and up 57.3% from 2007. U.S. imports from are up 394% from 2001 (pre-WTO accession). U.S. imports from China account for 21.6% of overall U.S. imports in 2017.
These are impressive statistics, but what real story do they tell? Well, for one, when the Trade Representative notes that ‘imports from China account for 21.6% of overall U.S. imports in 2017, does he include iPhones in that calculation? Apple assembles iPhones in China via a contractor called Foxconn. Foxconn has plants all over the place, not just China and parts for iPhones may very well come from Thailand or the Check Republic. Is an iPhone a Chinese product considered an import from China? China has established social processing zones also known as export processing zones (EPZs) where foreign corporations like Apple can come and set up shop without paying all those annoying local taxes while, in many instances, ignoring health and safety regulations and paying very low wages. Some of these EPZs are huge encompassing whole cities and surrounding areas. EPZs exist in many parts of the world we used to call the ‘Third World.” They are where our toys, clothes, and a myriad of other products are made and/or assembled. All of these products are ‘made’ by American or Canadian manufacturers, who now maybe should be called importers, but they still call the shots in every way. The automobile industry assembles cars here and there but the parts come from all over the globe. Engines can arrive at an assembly plant in Québec or Michigan ready to be dropped into a car, so are all drive train parts. Body parts can be pressed in Mexico and batteries can also come from there. There is no such thing as a “Canadian” car. Trump either knows this and doesn’t care or has it in for the  auto sector for some reason. I wonder if Trump has done the political economic calculus on his tariff plans for the ‘Canadian’ auto industry or if he just wanders off flying by the seat of his pants making decisions that are clearly arbitrary. It’s been well established that putting tariffs on ‘Canadian’ cars will put a significant dent in the profits of American car companies. Trump doesn’t seem to mind. Maybe he thinks it’s fake news. Some people have argued that Trump is just trying to force American corporations to manufacture their products on American soil. The fact is, that horse has already left the barn and there’s no way of getting it back, even if plants could retool. It used to be that the Ford plant in Dearborn, Michigan imported from around the US and abroad all the raw materials required to build a car, manufacture the parts and assemble the cars on site. That is no longer the case and hasn’t been since the creation of shipping containers and the need to acquire parts more cheaply than possible from American sources only. ‘American’ cars are manufactured all over the world. Capital, like the weather, ignores borders. We live in a global world with a global economy. The existence of nation-states or countries is still a fact because taxes need to be collected and passed on to the corporations and workers need to be managed. So far, it seems better to do that locally than globally. That may very well change and there are signs that it is. Trump’s Americans are not happy about the decline of their precious country, but their world is not contained within their borders and the sooner they realize that the better.