Fascism and State Terrorism 
(Second of three parts)

Outside its own borders, U.S. imperialism has frequently sponsored fascist regimes in its client states such as the Marcos dictatorship in the Philippines, Suharto in Indonesia, Somoza in Nicaragua, Batista in Cuba, Duvalier in Haiti, Trujillo in the Dominican Republic, the Shah of Iran, and of course Saddam Hussein himself when he was still useful to the U.S. 

By Paul Quintos 
Posted by Bulatlat.com

Likewise, fascism and state terrorism are underlying attributes of monopoly capitalism. Under capitalism the concentration of political power proceeds from the concentration of capital.  The monopoly bourgeoisie who own the biggest industrial and financial firms dominate production, distribution and consumption in the national and international economy. Therefore, they are also the ruling elites who use the extensive powers of the imperialist state machinery to protect their industries, secure sources of raw materials, markets and investment outlets, win over rival monopoly capitalists of other countries, but most of all to quell the resistance of the toiling masses whom imperialists must exploit in order to extract their profits. 

Indeed, Mussolini himself said, “Facsism should more appropriately be called corporatism because it is the merger of state and corporate power.” 

During boom years, bourgeois parliamentary democracy is generally adequate to assure the interests of the monopoly bourgeoisie.  But as the fundamental contradictions in the capitalist system give rise to the crisis of overproduction, the destruction of productive forces, social polarization, people’s resistance and protest, the ruling elite increasingly turn to more repression. 

Indeed, outside its own borders, U.S. imperialism has frequently sponsored fascist regimes in its client states such as the Marcos dictatorship in the Philippines, Suharto in Indonesia, Somoza in Nicaragua, Batista in Cuba, Duvalier in Haiti, Trujillo in the Dominican Republic, the Shah of Iran, and of course Saddam Hussein himself when he was still useful to the U.S.  For the U.S., these dictators were most convenient to suppress progressive and revolutionary forces fighting the tyrannies of imperialist domination and local comprador-landlord rule. 

Directly, through wars of aggression and indirectly, through fascist and repressive client states, U.S. imperialism is by far the most guilty of using state terror against the people of the world. 

At the homefront, the U.S. relies less on open fascist policies in the absence of a strong and militant labor movement.  Nevertheless, the history of U.S. police and intelligence agencies is replete with instances of covert operations used to harass and intimidate budding “radical” movements such as the Black Panthers, civil rights activists, and of course communists or suspected communists and their sympathizers. 

Today, the present Bush regime in the U.S. is increasingly perceived as highly repressive if not openly fascist.  Americans’ sense of “vulnerability” (and the rest of the world’s empathy) after the 9-11 bombing has been exaggerated and cynically manipulated in order to re-channel rising social unrest, whip up mass support for America’s “War on Terror” even as it involves armed intervention and the curtailment of civil liberties and democratic rights both at home and abroad.  The Bush government has expanded its repressive arsenal in the homeland through the Patriot Act and a new Department of Homeland Security – which curtails free speech, allows warrantless arrests, more intrusive surveillance of suspected “terrorists” broadly defined, and so on. 

Imperialist crisis and “globalization”

But the rising tide of fascism and military aggression today is actually the frenzied face of U.S. imperialism in decline.  Indeed, today’s wars must be situated in the current phase of the general crisis of imperialism. 

Since the 1970s, the economies of the advanced capitalist countries have been characterized by sluggish growth. Even as big business continues to invest in new technologies in its drive to extract ever greater profit, growth rates, national productivity rates, capital stock formation and net profit rates have been on the decline, save for the United States in the latter half of the 1990s (Figures 1-4).  Average net profit rates in the G7 countries fell from 17.6% in the 1950-70 period to 13.3% in 1970-93 (Figure 2).

Only the U.S. economy appeared vigorous in the second half of the 1990s.  But this was due to a speculative build-up in the equities markets using foreign borrowing which fueled overinvestment in information technology and buoyed consumer spending.  In Germany and France, growth was under 2% in the 1990s and their economies continue to battle recessionary pressures.  After decades of stellar post-war growth, the Japanese economy has been languishing in recession since the bursting of its real estate bubble in 1989.

Underlying this crisis is the fundamental contradiction in capitalism: between socialized production which enables great strides in the capacity of the productive forces on the one hand, and the private ownership of the means of production which ensures that only a few profit by exploiting the many.   This contradiction inevitably leads to crises of overproduction – a situation in which there is a glut in commodities and not enough people with the capacity to buy them.

The shift to neoliberal economic policies in the 1980s is monopoly capital’s attempt to revive falling profits due to the worsening crisis of overproduction – by forcing open markets, sourcing cheaper labor and raw materials, and securing profitable investment outlets.  Through the IMF, WB and the WTO – all of which are imperialist-controlled institutions – liberalization of investments and trade, the privatization of public assets, and the deregulation of economies are imposed on dependent countries under the benign slogan of free-market “globalization”. 

But neoliberal reforms which aim to maximize profits and minimize wages, benefits and social spending for workers and the people have only resulted in the immiserization of the broad masses.  And this further constricts the markets for overproduced goods of monopoly capital, thus, in fact exacerbating the crisis of overproduction. 

Overproduction and speculation

The Economist noted in 2000: “Thanks to enormous overinvestment, especially in Asia, the world is awash with excess capacity in computer chips, steel, cars, textiles, and chemicals. The car industry, for instance, is already reckoned to have at least 30% unused capacity worldwide yet new factories in Asia are still coming on stream…. None of this excess capacity is likely to be shutdown quickly, because cash-strapped firms have an incentive to keep factories running even at a loss, to generate income. The global glut is pushing prices relentlessly lower. Devaluation cannot make excess capacity disappear; it simply shifts the problem to somebody else.”

It has also been said that overcapacity in the world economy has increased to its widest level since the 1930s.  Global steel makers are able to produce as much as 300 million tons of steel in excess of what global buyers are prepared to buy.  This prompted the US to hike its tariffs in steel last year.  A mere 2.5% of the global infrastructure for telecommunications is actually utilized today after the overinvestment boom of the 1990s.  The tech-bubble in the US was clearly bound to burst as it eventually did in 2000. 

With overproduction rendering further investment in new productive capacity (such as factories and employment) unprofitable, speculation in currencies, equities, bonds, financial derivatives, and the like have provided a maddeningly lucrative outlet for the surplus capital in the hands of monopoly capitalists. 

Portfolio or speculative capital flows made up the fastest growing segment of net capital exports in the 1990s, rising from US$3.7 billion in 1990 to US$51.0 billion by 2000. Since 1989 daily nominal foreign exchange turnover has more than doubled to US$1.2 trillion on average today.  In 1976, 80% of all international transactions involved the buying and selling of goods and services. By 1997 only 2.5% of international transactions involved the buying and selling of the same; some 97.5% were for speculation.

While technological developments underpin this dizzying acceleration in cross-border financial flows, it is really the result of the rapid financial liberalization in “emerging markets” imposed by the IMF-WB and their principal, the U.S. Treasury as part of the neoliberal package of economic reforms – for the benefit of finance capital.  The so-called “emergent markets” are thus favored targets for portfolio investors. On their part, the local ruling elites in these client states welcome these massive speculative inflows because they help mask the perennial trade and current account deficits intrinsic to neocolonial backwardness. 

In the centers of monopoly capital, the finance oligarchy employ arcane financial chicanery to recycle their surplus capital through the financial markets, artificially inflating asset values and thereby earning fictitious profits such as those exposed in the wake of the Enron scandal last year. 

Poverty and inequality

For the working class in both the advanced capitalist countries and in their neocolonies, overproduction means layoffs, unemployment, job insecurity and intensifying exploitation for those that remain employed. 

The International Labour Organization (ILO) estimated open unemployment at approximately 160 million worldwide at the end of 2000. This is 20 million higher than before the peak of the Asian Crisis in 1998. Some three billion or one-third of the world’s labour force are either unemployed, underemployed or earn less than is needed to keep their families out of poverty.  Moreover, a growing share of the working population is forced into lower-income and insecure forms of employment. In unindustrialized countries, more and more people are forced to survive in the informal sector where earnings are low and erratic and labor standards are not enforced.

The UNCTAD acknowledges that while profit shares have risen in developed and developing countries alike, the share of wages in manufacturing value-added in four out of five developing countries today is well below that in the early 1980s.  It also said, “Absolute falls in the real wages of unskilled workers – 20 to 30% in some cases – have been common in developing countries since the early 1980s.”  The ILO’s 1998-99 report also affirms that “the share of salaries in world output went down almost everywhere in the world.”

According to the United Nations Development Program’s (UNDP) Human Development Report, the richest 20% of the world’s population in 1960 already cornered 30 times the income of the poorest 20%; in 1997, this worsened to 74 times. The assets of the three richest persons in the world were greater than the combined gross national product (GNP) of the 48 least developed countries comprising 600 million people. In the advanced capitalist countries, newly created jobs pay lower wages, forcing workers to hold several jobs to be able to meet a decent standard of living.

War against the people

Hence, after two decades of neoliberal restructuring, “globalization” stands indicted for unmatched poverty in the world, inequality, indebtedness, environmental degradation, and economic and social insecurity of the vast majority while the wealth and power of monopoly capital has grossly increased. 

People’s resistance to imperialist globalization is therefore gaining in strength in the neocolonies as well as in the centers of capitalism.

Monopoly capital’s drive to accumulate and expand is constrained by people’s movements, anti-imperialist forces, armed revolutionary movements, and growing inter-imperialist rivalry. Amidst these, U.S. imperialism is pressed to increase the use of naked force to organize and enforce its global exploitation.  In its desperation to control more markets, raw material sources and cheap labor havens, strategic territories and hem in imperialist rivals or non-pliant countries, US imperialism has embarked on expanding and consolidating its political and military hegemony throughout the world in order to secure its economic interests.

As Thomas Barnett, a professor at the U.S. Naval War College and an advisor to the Defense Department wrote (in Esquire Magazine, March 2003) in rather crude but nonetheless accurate terms:  “If we map out U.S. military responses since the end of the cold war, we find an overwhelming concentration of activity in the regions of the world that are excluded from globalization’s growing Core—namely the Caribbean Rim, virtually all of Africa, the Balkans, the Caucasus, Central Asia, the Middle East and Southwest Asia, and much of Southeast Asia.  If a country is either losing out to globalization or rejecting much of the content flows associated with its advance, there is a far greater chance that the U.S. will end up sending forces at some point.  Conversely, if a country is largely functioning within globalization, we tend not to have to send our forces there to restore order to eradicate threats….”In sum, it is always possible to fall off this bandwagon called globalization.  And when you do, bloodshed will follow.  If you are lucky, so will American troops.”

Through war and militarism, U.S. imperialism is taking advantage of its unrivaled military superiority in order to maintain global dominance while offloading surplus capital and boosting profits for monopoly capitalists.  War spending is a tried and tested strategy of monopoly capital to stimulate the economy.  More importantly, colonial conquest and “nation-building” is opening up new spaces for economic expansion and control particularly in countries which have not been hospitable to the penetration of U.S. monopoly capital (i.e. countries asserting their independence but demonized as “rogue states”). 

Furthermore, controlling oil strengthens the U.S.’ ability to control the economies of other nations; a tactic that becomes ever more critical as global oil reserves diminish. Posted by Bulatlat.com 

*Paul Quintos is the deputy executive director of Ecumenical Institute for Labor Education & Research, Inc. (Eiler) and a fellow of the Center for Ant-Imperialist Studies (CAIS). This paper was delivered at the 19th International Solidarity Affair, The Pearl Manila Hotel, Manila, Philippines May 7, 2003.

Pax Americana: Casus Belli (First of two parts)

Imperial Overstretch (Conclusion)

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