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Wed

01

Nov

2006

The Balance of Power: China and Wal-Mart
Wednesday, 01 November 2006 15:19

by Rod Amis

 

Three years ago, I began an outline for a foreign policy article, the major thesis of which was that it seemed inevitable at the time that Europe, Africa and South America – if not Australia, for reasons I'll elucidate below – would have to tilt toward the Peoples' Republic of China (PRC,) if for no other reason than to counterbalance the growing economic and military will-to-hegemony of the United States. It was meant to be a reasoned, long-form, foreign policy article to which I could refer back in future considerations.

 

The impetus for the article was that I believed not enough serious foreign-policy consideration was being made from a dissident and (far) leftist perspective at the time. Looking back on that outline today, for an article never completed, it's easy to pat oneself on the back for being prophetic. But, as Conan Doyle wrote, it was "elementary." There was nowhere else for the world to go. There were two reasons for that conclusion three years ago and those same two reasons obtain today:

Nature abhors a vacuum. The very notion of a unipolar world contradicts everything we know about the dynamics of power in international relations. Even during the Roman empire, let alone the British, there were constant threats and challenges from the community of nations which undercut the will-to-hegemony of the then-dominant power.

In the case of Britain, there was always Austria-Hungary and intermittently France and Spain. In the case of the Romans, there was Carthage, Egypt and those forces that the victor's historians characterized as "barbarians" or "pirates" since they represented no formalized nation states. There was also the formidable and tragic Jewish rebellion. That is was no small matter is evidenced by the fact that Jerusalem was the second city, after Carthage, to be completely razed and sown with salt.

Nonetheless, all of these actors put brakes on the hegemonic impulses of the Great Power of their age to far greater degrees than did internal and domestic political influences. There is a paradigm here worth consideration.


Other (and more astute) students and commentators on history and geopolitics have noted that nation-states, per se, are not the only dominant actors in the world we face in the twenty-first century.

There are now corporate "states," so to speak, with budgets that exceed those of most nations and influence that is genuinely transnational. Thus, it is not a stretch to suggest that Microsoft Corporation, Wal-Mart – the world's largest corporate entity – or certain Non-governmental Organizations – such as those founded by Soros or Gates –have as much potential impact on geopolitical development as do the nation-states still clinging to their atavistic and nationalistic sense of self-importance and "destiny."



Speaking first to my second point, it is no secret that Wal-Mart is in bed with the PRC or that that "marriage" had been part of the formula for the corporation's success. The implications of this marriage have been evident and chafe some activist organizations, particularly those concerned with labor issues, but have had little impact on the shopping decisions or view of global economics of most American citizens – the very people who made this marriage's honeymoon so enduring. Jingoistic politicians in the United States can be depended upon to point to the PRC as a potential threat to "national security" but fail to make the economic or geopolitical connections of the dots that would truly inform the citizenry. These politicians are far too busy pandering for the next election, much as the corporate "citizens" are focused on keeping the shareholders at bay with the latest (short term) quarterly reports rather than taking the long view.

This short view approach in US political and business analysis must needs create an ahistorical and unrealistic assessment of both geopolitics and foreign policy. Penny-wise and pound foolish, to coin a phrase. Returning to the first conclusion of this analysis, Europe expressed its discomfort with the triumphalism of the United States by way of the contrarian response of its two major actors, Germany and France – and to a lesser extent the Italians and the Greeks, still smarting from American intervention in their region during the Kosovo war – in the lead-up to the Iraq invasion. It was clear that alternatives to complete American domination were attractive, even if those alternatives required a "strange bedfellow."

As to Africa, always neglected and denigrated, and South America, the choice was a no-brainer. The Chinese have always been interested in expanding into these regions, as they demonstrated during the Cold War between the United States and the Soviet Union, and were now adequately prepared to do so if for no other reason than the imperative of securing access to energy resources. The United States focus on the Middle East oil reserves left no other options for the Chinese than to look to these two other continents. This overview brings us to a consideration of the geopolitical landscape and an analysis of its future, today and into the next decade or two.

Age of Empires

This consideration would remiss if it did not address the issue of the Anglosphere, an implicit part of US neoconservative thought and much of the political discourse by those who would characterize the latest crusade, the so-called "War on Terrorism" as a "Clash of Civilizations." There should be little argument among dissidents and internationalists, if not leftists, about the ethnocentric and seemingly racist base for this entire notion of an "Anglosphere." It is the British Raj resurgent. Were it not bad enough that revisionist social historians like Ben Wattenberg celebrated the notion of the United States establishing a "Universal Culture" – one that devalues all others – the very idea of the Anglosphere feeds into the new establishment of walls against "The Other" around the globe, from Israel to the Czech Republic to the US-Mexico border.

We are all now aware that the most stolid supporters of the "Coalition of the Willing" in the invasion and occupation of Iraq, a disaster of historic proportions, have been the chief member nations of the Anglosphere, the United States, the United Kingdom and Australia. That Australia has bought into this fantasy of empire, promulgated once by the likes of World War II general Patton in a moment he thought was "Off the Record" may come as a surprise to some. Some may remember Gough Whitlam's Australia and resent that we have to accept that of John Howard. Nonetheless, if any of the nations of the proposed Anglosphere must face the reality and proximity of China, it is Australia. That there is a lack of visionary leadership at the top of its government and a seeming unwillingness to fully accept its relationship to the new Asia speaks volumes. Australia, for all intents and purposes, seems to have bought into this neo-conservative notion of an Anglosphere as part of the future of the 21st century and thus relegated itself to the continuing status of a client nation.


China's Long View

The following links to news articles are intended to provide the reader perspective on the PRC outlook as it stands today and offer some "hard news" information for your consideration of the author's conclusions:



These news stories present an overview of a focused strategy on the part of the PRC.

Not that it has not meant some criticism, to which the Chinese quickly respond.

ASIDE: There is little or no comment about the perspectives and facts of the geopolitical situation characterized by the stories linked to above in the media presenting foreign affairs and foreign policy in the United States as this article is written. Those stories might as well have been written from another planet if you take the perspective of the New York Times, Washington Post, or any major television networks in the US. CNN International might provide similar perspective but the domestic US version of CNN does not.

END OF ASIDE.

Of note, as pointed out by the final article cited from the People's Daily, is that the PRC's long-term and opportunistic economic alliance strategy has not significantly changed over three decades. China has never completely abandoned its position of "small footprint" economic development and trade agreements in Africa.

In addition, it has expanded its influence in South America over the last decade, making significant headway as regards energy resources. Meanwhile, something that would have not been imagined during the 1970s, China has a significant stake in its trading relationship with the United States and the upper-hand in trade relations – especially as regards the increasing American trade deficit and the latter's debtor status brought on by military adventurism.

Balance of Power

This assessment has made much of nation-state relationships, it can be argued, and perhaps not enough of corporate-state influence. Because the focus has been foreign policy, the author must accept such an assessment while pointing out that the influence of corporate-state influence is best served in another context. While it impacts foreign policy it is not within the purview of transnational corporations, at least ostensibly, to formulate or dictate the relationships between nations, weak as they might be as entities in our modern environment.

The irony of the situation that now obtains is that the preeminent nation-state, the United States of America, by its own actions in the foreign arena undercut its own interests and brought about the rise of China as a viable alternative choice with which other countries could align as a counterbalance to American dominance.

When we understand and connect the countervailing influences of corporate-state power and how it has superceded nation-state power, the United States could not but have made some of the choices against its own domestic national interests. This is true because corporations no longer honor or even consider national allegiances as they did during the mercantile age that characterized the rise of Britain.

Today, because corporations no longer need recognize national limitations of labor or resources, and because they can influence national policy by means of supporting - or failing to do so - those individuals seeking to handle the levers of power by means of funding, the needs of individual nations are less important to them than the needs of international capital, the shareholders. The upshot of this new geopolitical reality for the United States entering the 21st century, was that its government had become less a representative democracy than a corporate vassal where interests of international capital superseded those of the domestic polity. Under such circumstances, the interests of Wal-Mart, Halliburton, et alia, were more important than those of Joe and Jean Six-pack.

At $51 trillion, government liabilities outstrip the current net worth of our population by nearly $10 trillion.

Put another way, as Matt Crenson recently did for The Associated Press, if the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. “That’s almost as much as the total net worth of every person in America—Bill Gates, Warren Buffett and those Google guys included,” says Crenson.

This is the picture as 77 million longer-living baby boomers are on the way to retirement, confronting America with a “coming generational storm” (Laurence Kotlikoff and Scott Burns) that threatens to swamp the U.S. government if not our entire financial system. Gokhale and Smetters calculate that by 2030 Medicare will be about $5 trillion in the hole, measured in 2004 dollars.

By 2080, the fiscal imbalance will have risen to $25 trillion.

– Bill Moyers, address before the Council of Great City Schools, 27 October, 2006

This new economic reality, evidenced through the rush for "free trade" agreements that characterized the end of the 20th century, led to a political climate in which, following the tragedy of September 11, 2001, a radical and revolutionary shift in foreign policy could be accomplished.

Revolutionary, because it ignored if not repudiated decades of establishment foreign policy precedent which emphasized maintaining a geopolitical balance of power and went to great effort in providing a justification (even if fabricated) for intervention in the affairs of sovereign nations and promulgated what is now generally known as "The Bush Doctrine. " At the center of the Bush Doctrine is the assertion that adversaries of American corporate, imperial interests must be able to prove a negative.

In short, they must demonstrate that they are not a threat in order to not be treated as such. That this doctrine stands reason on its head, since it is impossible to prove a negative, has lead the United States to its current position of decline in the international arena. To support such a doctrine, billions must be squandered in its military and economic enforcement. The result is becoming a debtor nation that must establish a military presence far beyond either its resources in population or raw materials.

Which brings our analysis back to the relationship between China and Wal-Mart.

China has both raw materials or negotiates access to them by its "small footprint" approach to nations in the resource-rich southern hemisphere of the planet and population – a labor pool that does not demand the compensation that the last century made Americans begin to consider tantamount to a birthright. Wal-Mart, in its march to become the premier corporation of the consumer age, realized early on that "discount" goods for the public could only be provided on a vast scale by establishing a relationship with a labor market so massive that it could dictate the pricing of its suppliers rather than the other way around.

The significant difference for these actors, as opposed to their historical predecessors – either in the spheres of politics or economics – has to do with the technological advances of the last hundred years. Empires of the past – and we must now consider corporate-states a form of empire – had the advantage of a slower pace of change. Changes that might have taken a hundred, or hundreds of years, prior to the Industrial Revolution, now can be accomplished in mere decades.

Therein lies both challenge and promise. China, if it can resist the impulse that capital thrives on for short-term results and continues to take a long view, might actually endure this accelerated pace of change. The United States, with a bit of economic chastening, might also continue to be a factor in the geopolitical equation. Wal-Mart is likely the least fortunate of the actors, if only because a focus on quarterly reports fails to recognize the reward that history provides to endurance and the long view.

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