World capitalist crisis threatens humanity


By JEFF MACKLER
A July 17 New York Times article entitled “Japanese Consumers Reconsidering Rice Loyalty” attracted my attention when it reported that “Japan’s agricultural ministry, for now, says it is not considering an increase in rice imports, which are all but shut out by a 778 percent tariff.”
This enormous tariff led me to wonder if The Times had not made a typographical error. Perhaps the actual tariff figure was 7.78 percent or even 77.8 percent? But an on-line Times correction 10 days later indicated that the only “correction” was in the name of the multinational corporation that actually did import rice into China, Seiyu Wal-Mart, which appeared in the original article as just “Wal-Mart.”

The multi-billion-dollar multi-national WalMart corporation was apparently able to pay this 778 percent tariff and still make a profit by selling near slave-labor Chinese-grown rice to Japan. But China is not the only country able to penetrate the Japanese market and still make a profit. U.S. rice producers, using the most sophisticated technology in the world—including aerial seeding, genetically engineered low-water requirement strains, and super-modern harvesting and processing equipment—are on the same road but with different methods. The secret of Japan’s imperialist competitors’ success is the employment of near slave labor on the one hand or the use of state of the art technology on the other.
The Times article, reflecting the concerns of U.S. business interests, continues: “‘We’d simply like to see demand dictate where U.S. rice goes, not the [U.S.] government,’ said Robert Cummings, chief operating officer at the U.S.A. Rice Federation.”
Japan’s present rice shortage was a product of the government’s ban on the sale of rice from some 18,000 acres of contaminated Fukushima farmland following the March 2011 meltdown of three tsunami-stricken nuclear reactors. Despite government guarantees that Japanese rice outside the Fukushima region was “sufficiently” free from radioactive cesium and related contaminants, Japanese consumers tend to mistrust government assurances, especially given the long series of now refuted official proclamations.
If we may put the horror of the Fukushima disaster aside for a moment, including the resulting spread of deadly radioactive material in the atmosphere and oceans, the economic implications of a world driven by capitalism’s inexorable drive for profits at the expense of human life are revealing and go far beyond the present squabbles over rice tariffs.
World trade in the era of neo-liberal or laissez-faire/free-trade capitalism is supposed to be regulated by agreements between the world’s major contenders. International institutions like the World Trade Organization (WTO) or treaties like the General Agreement on Tariffs and Trade (GATT) are supposedly aimed at restricting or eliminating tariffs and all other barriers to “free trade.” The truth lies elsewhere.
As the U.S. Rice Federation states, demand and demand only—the free market—“should” dictate the price of rice and its destination. But the Rice Federation neglects to mention that all international trade agreements and organizations are based on enforcement of negotiated agreements between competing capitalists, agreements that include literally thousands of exceptions—as with Japan’s huge rice tariff against foreign imports.
In the case of Japan, whose highly efficient auto industry constantly undermines the profits of U.S. car corporations, these tit for tat multi-billion-dollar agreements can have the effect of protecting one or more of its weaker industries against powerful competition from other nations. Japan’s high rice tariff, for example, might be accompanied by an agreement to place a U.S. tariff or other such limitations on the importation of another Japanese commodity. Treaties like NAFTA (North American Free Trade Agreement) include innumerable protectionist exceptions of this type.
One nation’s concession to another with regard to Product A, for example, is given back in return for similar dispensation to Product B, but almost always with a bonus to the most economically powerful of the negotiators. The weaker the competing nation, the more concessions it is forced to agree to in order to secure access to foreign markets and/or protect its own. The major ruling-class representatives of the world regularly meet to negotiate the benefits for each of their countries, and then reduce these “government-approved” agreements to the status of international law.
When treaties prove inadequate to mitigate the ever-intensifying competition inherent in world capitalism, the weaker nations and their peoples are driven to near bankruptcy, as is the case with the present world economic crisis.
To increase their worldwide competitive edge in auto production, for example, Japanese corporations have shifted production to super-low-wage India. Last month workers at the New Delhi-based Maruti Suzuki factory, which makes half of all cars sold in India and is controlled by the Japanese automaker, were burned in a fire that destroyed a portion of the plant during a confrontation with police and management goons. One hundred workers were arrested while protesting Suzuki’s contracting out thousands of jobs at sub-minimum wages and in violation of Indian law. “Temporary contract” workers, with few rights, are paid a fraction of the wages of permanent workers—about $126 monthly as compared with $324 a month for permanent workers.
While there are numerous international agreements to eliminate tariffs and other trade restrictions that may temporarily mitigate this ongoing deadly competition, there are no such international agreements regulating wages, hours, and working conditions. Here, only capitalism’s law of the jungle applies—enforce the “race to the bottom” to maximize profits at the expense of workers everywhere and the environment!
Economic warfare takes its hardest toll on the workers of the weaker capitalist powers, as is the case today with Greece, Ireland, Spain, and Italy—where the ruling rich seek to mitigate their ever-declining profitability by imposing draconian austerity programs that wipe out in a day gains won over decades. But the capitalist behemoths are not immune, as we see in the U.S., where the bankers and corporate rich are compelled to do the same at the expense of U.S. workers, youth, and the poor and oppressed.
In the above equations, countries of the underdeveloped world have virtually no influence and are subjected to the rape of their economies, resources, and people as well as the regular imperial installation of neo-colonial military regimes.
Economic warfare takes many forms, some deceptively peaceful, and others overtly violent. The half-century embargo/blockade imposed by the U.S. against revolutionary Cuba is every bit a war, but by other means. Only Cuba’s socialist revolution has allowed the nation to survive. Aimed at re-imposing the old colonialism, poverty, and exploitation on the heroic Cuban workers and farmers, the embargo is aimed at regime change—nothing less.
What applies to Japanese rice applies with brute force to Cuban sugar production. With the demise of its former USSR and Eastern European trading partners, Cuba lost some 85 percent of its trade and close to all of the market for the sugar it produced as the nation’s main cash crop.  Cuba’s once state-of-the-art sugar industry, which produced an average of seven millions tons yearly for decades—ranking sixth in the world—saw its sugar exports drastically decline. Its access to spare parts and replacement machinery, as well as oil to fuel its refineries and harvesting equipment, reduced sugar production to below 1.2 millions tons by 2005-6. Tractors and associated heavy equipment had to be replaced by oxen to cultivate fields.
Equally horrific was the fact that the world market price of sugar, a result of the corporate machinations of the largest consumer nations, dropped by 50 percent, further exacerbating the stresses on Cuba’s already beleaguered economy. The cost to Cuba of the U.S. blockade exceeds $50 billion since 1960.
In a similar manner the U.S.-led sanctions against Iran, cynically demonized as a “terrorist” nation by the U.S. government and its captive media, are today enforced by threatening U.S. warships in the Persian Gulf, costing OPEC’s third-largest producer $133 million a day in lost sales. In contrast to the U.S. empire, with 1100 military bases around the world, Iran has never invaded another nation and has no bases anywhere outside its borders.
“Oil shipments from Iran,” according to the Aug. 2 San Francisco Chronicle, “have plunged to 1.2 million barrels a day, or 52 percent, since the sanctions banning the purchase, transport, financing and insuring of Iranian crude began July 1.” On an annualized basis Iran’s losses will be $48 billion, or 10 percent of its economy.
When oppressed people anywhere fight back and remove the dictators imposed by the U.S., they are punished, as with the U.S.-financed 10-year war against Iran beginning in 1979-80, waged by the then U.S. surrogate Saddam Hussein dictatorship in Iraq. That war, which saw much of Iran’s oil facilities destroyed or idled, cost the lives of one million Iranians and an equal number of Iraqis.
Similarly, the U.S.-sponsored coup in Iran in 1953 replaced British oil contracts with American ones after replacing the democratically elected president, Mohammad Mossadegh, with the brutal Shah Mohammad Reza Pahlavi. Just who are the real terrorists?
The ever-intensifying U.S. wars, sanctions, embargoes, blockades, drone bombings, mercenary death squads, armed interventions, renditions, and torture are matched by the less obvious but critical exercise of power in the economic arena. In both instances we are witness to a social system, capitalism, driven to destruction by its inherent contradictions rather than the conscious decisions of its leaders. Capitalist competitors from each country, driven by the same mad logic, have no alternative but to participate and retaliate to ensure their profits.
Working people have no interest in defending any aspect of this world social system heading for disaster. Marx said it well in the closing admonition of his famous “Communist Manifesto,” “Workers of the world unite! You have nothing to lose but your chains.”