Selected Analysis

The fall of the Western Model

By Thierry Meyssan /Voltaire Network/ – The Western model, based on capitalism and democracy, no longer manages to defend the general interest or guarantee popular sovereignty. By accumulating these two failures, it brings together the two ingredients of a generalized revolution.

The crisis of capitalism

Historically, the crisis of the West began with the crisis of American capitalism in 1929. At that time, the majority of books and newspapers claimed that the concentration of capital sterilized the economy by preventing competition in many areas. While famine was raging in the US, three political models were proposed by the press at the time to break the economic deadlock:

– Leninism with the nationalization of all productive goods at the risk of destroying all individual initiative;

– the fascism of Lenin’s former representative in Italy, Benito Mussolini, who planned not to fight against the concentration of capital, but to organize it within corporations, at the risk of making employees lose all possibility of resisting abusive employers;

– Franklin Roosevelt’s progressivism, for whom technology was supposed to revive the economy and provide the solution as long as competition was restored by dismantling large corporations (according to Simon Patten’s doctrine).

It was Lenin himself who noted the failure of his economic theory during the Civil War. He then liberalized foreign trade and even allowed some private enterprises in the Soviet Union (the New Economic Policy – NEP). Fascism could only develop at the price of terrible repression. It was swept away by the Second World War. Progressiveism remained the rule until the 1980s when it was challenged by the deregulation of Ronald Reagan and Margaret Thatcher.

This fourth model is now also challenged by the destruction of the middle classes caused by globalization. President Bush Sr. thought that with the disappearance of the USSR, the search for prosperity should replace the military rivalry between Washington and Moscow. He allowed some US companies to form an alliance with the Chinese Communist Party and to relocate factories to the Chinese coast. Even though Chinese workers were not trained at all, the cost of their labor being twenty times lower in China than in the U.S., these companies accumulated colossal profits that allowed them to impose a much greater concentration in certain sectors than in 1929. Moreover, they made most of their profits not from the production of goods and services, but from the income from their liquid assets. Capitalism changed its nature once again. It was no longer productive, but had become financial.

Chinese workers, having gradually trained themselves, have now become as costly as US workers, so that relocation now affects their own country to the benefit of Vietnam and India this time. We’re back to where we started.

The US companies that have undertaken to relocate their jobs to China and to financialize their activities have managed to amalgamate their ideology of “economic globalization” with the globalization of the use of new techniques; two unrelated things. Indeed, while new techniques can be used everywhere in the world, they cannot be used at the same time, as they require energy and raw materials.

They have therefore convinced Secretary of Defense Donald Rumsfeld to divide the world in two: on the one hand a zone of global consumption, around the USA, Russia and China, and on the other a zone of resources to feed the former. The Pentagon then decided to destroy the state structures of the Broader Middle East so that the people of the region would not be able to resist this project; what George W. Bush called the “war without end”. Indeed, eternal wars began in Afghanistan, Iraq, Libya, Syria, Yemen, each time allegedly for different reasons, but always with the same aggressors, the jihadists.

In 2017, Donald Trump and Xi Jinping decided at the same time to fight against this phenomenon, the former through protectionist nationalism and the latter through economic nationalism. However, Trump’s proposed tax reform was rejected by Congress: the Border Adjustment Act would have liberalized exports and taxed all imports at 20 per cent. For his part, Xi Jinping created a body to monitor the conformity of corporate objectives with those of the nation, the United Front, at the 19th Congress of the CCP. A state representative was introduced into the board of directors of each major company.

Trump’s failure to get his tax plan through led him to try to obtain the same benefits by declaring a customs war against China alone. The CCP responded by trying to both develop its domestic market and direct its overproduction towards Europe. The latter immediately paid the price. As always when governments are not attentive to the plight of their people, the economic problem causes a political crisis.

Read the full story on Voltaire Network

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