Tuesday, September 05, 2006

One of three very lucky students to be mentioned in MR - Monthly Review Excerpt

Our good friend and MR and MR Press author Cornel West gave a speech at The Evergreen State College in Olympia, Washington on April 8, 2005, in which he described Evergreen (from which two of MR’s editors, John Bellamy Foster and Robert W. McChesney [editor, 2000–2004], graduated) as “the last great experimental college in the American empire.” Recently, MR author Alan Nasser, who has taught political economy at Evergreen since the 1970s and who retired at the end of this past school year, has written to us regarding some of his teaching experiences and the importance that MR assumed in his courses. He wrote that his class last school year on Philosophy, Society and Globalization consisted of “twenty dazzling students, more than half of them MR subscribers by the end of the class, and the best class I’ve taught in forty-three years. Most of them continued with me in U.S. Foreign Policy in the spring.” As a concrete illustration of MR’s impact on his students, Alan forwarded a recent e-mail message from a star Evergreen student, who was visiting Europe with his family. Feeling stranded, and agonizing on the continuing assault of the right in the United States, echoes of which were reaching him on the other side of the Atlantic, the student wrote: “I had a dream that somehow I had an extra MR with me and my entire night seemed lighter. It was silly and childish and indicative of how ironically insular I feel my life is right now. Help!” Although officially retired, Alan plans to continue teaching a few students each year for a few more years. Next year he will be working with three very lucky students in a course that he described to us as “a full-time program on MR’s Analyses in the Golden Age.” They will read and discuss back issues of MR in the University of Washington collection, as their core course material. Teachers who wish to discuss how to integrate MR’s analyses of political economy and foreign policy into their teaching (Evergreen style) may wish to contact Alan at alannasser@horbornet.com/.

Saturday, September 02, 2006

Pox Americana

“Nightly the packed mass meetings listened, panting, to patriot oratory which stirred the deepest deeps of their hearts and which they interrupted at briefest intervals with cyclones of applause, the tears running down their cheeks the while; in the churches the pastors preached devotion to flag and country and invoked the God of Battles, beseeching His aid in our good cause in outpouring of fervid eloquence which moved every listener.” So goes Mark Twains War Prayer, hitherto the most applicable allegory for the policy of the United States. With the United States façade of a liberating, democratic, and accommodating foreign policy that realistically has no regard for history, human rights, or economic rights, a peril emerges in the world, the peril of Untied States hegemony. If history shows us anything it’s that we don’t learn from history. So for the time being lets get funky with these spineless neo-liberal battle gods, or using a more suitable vernacular, battle dogs. Now, the peril of the pox that is and always has been the United States Empire is its current legitimacy. Those war prayer preachers of Inquisitions and holly warriors of crusades are loosing their legitimacy, or so the threat would seem. This doctrine has come subject to the almighty force of change, for centuries and centuries of manifest destiny have come under siege.
No longer are people willing to bequeath themselves to Christian martyrdom, recruitment and self assignment is at an all time low, as slowly the battle dogs are exposed for their maliciousness. The minds of these dogs see a siege of a reemerging conflict between hyper powers. The tendency of imperial competition is loosing its displacement, the U.S. is loosing its footing in the European powers. New powers are emerging in East Asia that are a largely a result of the contradictions of capitalism. It seems a final battle is being waged in the both economic and geopolitical arenas. The IMF and World Bank’s economic imperial involution is loosing legitimacy and manifest destiny in the Persian Gulf is proving cost more than anticipated. However, first the objectives and goals of the U.S. economic and political endeavors must be clarified. Beyond the nominal aspirations, what are the larger de facto implications of the National Security Statement and the PNAC? Instability I might argue. Looking back at the Vietnam War, one might argue the U.S. triumphed in the executions of its objectives, those being monolithic devastation, economic desolation, and gross human suffrage. Analyzing the current security measures, it becomes clear that state bureaucracy fears it’s loosing its legitimacy and in reaction to the foregrounding of opposition a last full-fledged effort of supremacy and hegemony is being waged. By control surrogating access, the message is clear, the world belongs to us; access is irrelevant, control is the mission, control at any cost. Lets not forget, instability is a form of control.

Thursday, August 31, 2006

Government Spending as a necessary contradiction

There is a reemergence of neoclassical economic theory reactionary to the macroeconomics of the golden age that stems from the nature of the capitalist system. There is an inherent tendency for capitalism to stagnate, curtail social welfare as a necessary expenditure for profit maximization, and depend increasingly on the state as a panacea for the declining marginal efficiency of capital. I shall attempt to show that in mature monopoly capitalism the growing reliance on the state’s short-term ability to soothe stagnation is the final step to save a dying economic system. First I shall explain the state’s neoclassical role preceding the emergence of stagnation in the Great Depression followed by the shift of the state’s dynamics in the mature stages of monopoly capitalism. What was next witnessed after the stagnation of the 1930s was capitalism’s largest prolonged expansion. This ‘golden age’ was increasingly fueled by self-destructive economic policies, such as the much greater role of government spending and deficits, a self-medicating supplement to the decline of investment and investment opportunities.
I shall the discuss the larger picture of Keynesian macroeconomics, where fiscal and monetary policies attempt to iron out the business cycle from capitalism, and nationalization and redistribution of wealth are surrogated by the military industrial complex and growing availability of consumer credit, eventually cumulates to a retroactive crisis that potentially spells the end of capitalism. What we see emerging as a defense to this demise is a final attempt to exploit the system for what little profit is left by enacting neoclassical theory incognito as neo-liberalism. This era following the golden age was characterized by massive rollbacks in social power and capital restrictions. As we shall see, government deficit spending has been realized as an essential vitality to the life of mature capitalism along with the demise, “in short today’s capitalism finds itself on the horns of a dilemma: it can’t live without deficits and it can’t live with them.”6 I shall conclude with an explanation of the dialectics of the government and the economy along with the dialectics of the proletarian and the system that directs and executes their thoughts and labor. Let me begin by looking at the government’s role before and during the Great Depression.
Government’s philosophic and historic role in capitalism has been the enforcer of private property rights, and conceptually under capitalism, only capitalists can own private property. Protecting the rights of the owners of capital has always been the government’s paramount role. Social welfare is the antithesis of capital welfare, and hence, has a tendency to be disadvantaged in a capitalist system. In the younger adolescent stage of market capitalism, competition was primarily local and non-conglomerate. “American capitalism during this stage was characterized by small businesses that employed fewer than 20 people and competed with one another in the widening markets mainly by price cutting. The prices of most goods fell over the later part of the 19th century. Workers, many of whom retained the skills they had acquired in independent commodity production, now found themselves working for a wage under capitalist supervision. The government played a crucial role in enforcing the rules of the game (for example, in enforcing contracts and in breaking strikes), but otherwise it played a minor part in the economy.”2 This stage is usually referred to as competitive capitalism and came to its end at the beginning of the 20th century. The primary role of the government was non-interference apart from the enforcement of capital interests.

Unions at the beginning of the 20th century were virtually nonexistent, and those that had established some grounds in the end of the 19th century were severely broken down and displaced. The neoclassical market theory of laissez-fair and the government’s assertion of private property rights left labor with little to no power in either bargaining for higher wages or demanding basic subsistence welfare. By a huge influx of immigration in late 19th century, the American reserve army of labor had rapidly grown, having only a modicum of power however, this labor was deep under the private sectors dominion and with this concentration of capital power, along with the sway of government assistance, the railroad was undertaken. Due to weakness in the state at this time, the Federal Government auctioned off 250 million square miles of public land to the railroad barons, an action becoming more and more necessary to compensate the weakness in the private sector.
Economic growth requires monolithic private capital investments—a constant industrial revolution. And due to the natural tendency to over accumulate, privatization avails as the growth and investment outlet for overcapacity; capitalism requires more and more privatization. This “shift from publicly to privately-produced goods and services is designed to phase out public programs and to repudiate governmental responsibility for social welfare.”7 What was implicitly or explicitly seen during roaring twenties was little corporate regulation and the freedom for capital to exploit labor at great lengths, a situation that was nominally progressive and prosperous, but actually unstable and cataclysmic. Hence, when the growth of the railroad peter out in 1914, and after World War One’s economic growth, the Roaring Twenties saw productivity soaring to unprecedented levels while wages and prices failed to follow accordingly (a mainstream anomaly). At this time the gap between incomes grew significantly as corporate profits even tripled in the manufacturing sector while the employment stayed relatively idle while even falling in certain sectors. Concentration and more importantly, centralization of capital along with little to no government regulation of speculation and capital power was what Robert Heibroner calls ‘the deepest-seated reason for vulnerability.’
When the stock market crashed in 1929 and stagnation emerged, economic theoreticians began to examine structural deficiencies in the capitalist system. “For the first time the possibility was frankly faced, indeed placed at the very center of the analysis, that breakdowns of the accumulation process, the heart and soul of economic growth, might be built into the system and non-self-correcting. The stage was thus set for a sweeping reconsideration of the whole theory of investment.”6 John Maynard Keynes released The General Theory as part of the reassessment of capital investment and its discontents. His theory was “devoted to showing how and why classical and neoclassical economic alike were wrong in assuming that there are built-in tendencies in capitalist economies to operate at full employment and hence to self-correct any deviations from full employment.”6 Keynes’s theory was a structural analysis, and in assessing capitalism’s tendencies he came to realize the deficiencies of automatic regulatory mechanisms. However, Keynes’s theory was “seen not as a highly original contribution to the understanding of capitalism’s basic modus operandi but as the invention of a set of clever recipes to counteract the ups and downs of the business cycle.”6 This understanding has come to dominate the understanding of Keynesian economic theory, while his original intentions have been disregarded, as they tended to expose the problems in the investment orthodox theory.
The reluctance in economic theory to practice Keynesianism as he intended should come as no surprise, it was in fact largely analytical and incredulous of classical market theory and came off as attacking the conjectures of capitalist paradigms. With the onset of World War Two Keynesian economics was temporarily closeted as ubiquitous investment opportunities mobilized the entire economy and government spending on the war and the following reconstruction/reindustrialization of Europe created massive investment outlets allowing the stagnating economy to be severely offset. Most importantly, the economic growth during World War Two was completely dependent on government’s military industrial expenditures, not capital regaining its youth. Capitalist nature had not proven otherwise to its tendency to stagnate (it could be argued however, that World War is also a tendency in Capitalism, but I’ll leave that aside).
Capitalism, as it stood in the latter years of the depression, was beginning to be exposed for its stringently harsh social tendencies and its fallible endless profit structure. As the declining rate of profit began to illuminate, a world war broke out and government spending on military soared from “$1 billon in 1939 to $79 billion in 1944,”1 mobilizing both capital and labor across the nation. Military spending became the axiom of government expenditures, accounting for ten percent of GDP, and ever soaring. Military spending being the only government spending capitalists allow, bolsters aggregate demand for output of the capital goods sector concentrating money to the rich, increases production without adding to producing capacity, keeps capital goods profits up while suppressing wages, and most importantly, military spending is a way for the government to increase demand and employment without competing with private capital. These expenditures used as a panacea for stagnation is what I shall call the bastard practice of Keynesian nationalization, a quite dangerous practice, as I shall show.
As World War Two came to an end and Europe was reindustrialized, the transformative epochal automobile project took off temporarily moderating government spending on infrastructure while increasing its spending on social welfare with the New Deal. However the economy was still dependent on the integration and diversity of military spending. It was indeed the national defense highway act under Eisenhower that allowed the booming auto industry and the temporary self-re-enforcing growth to expand to the extent it did. Of course the de juray role of these highways were landing strips for military emergencies. What was seen between 1948 and 1963 was the government taking in taxes without having to spend on social welfare due to the supposed strength in the private sector being able to keep unemployment averaging four percent. However, a steady decline in the rate of economic growth proved otherwise. The downward trend in business fixed investment proved that private investment was on the decline; capitalists were not moving their idle wealth. Inequality began to emerge at unprecedented levels and a steady incline in government spending attempted to compensate, “as the investment slowed down, the deficit (adjusted for price increases) kept rising rapidly.”6 However, “the ever-growing deficit was not able to arrest the course of stagnation. And the pressures brought about by stagnation in turn were such that an expanding deficit became more and more essential to forestall a major depression.”6 This is clearly seen in the deficit trends decade by decade throughout the golden age, were in the 1950s there were three years of surpluses and seven years of deficits, in the 60s, two years surpluses and eight years deficits, and in the 1970s there was a constantly run deficit. Government deficits always increase when facing a recession, but stagnation is different than a cyclical downturn and the growing dependence on government spending to supplement the decline in investment outlets and aggregate demand was seen in the growing imbalance in the budget decade by decade. Hence a nominal assessment of the economy would show a declining strength in the private sector.
Why was the private sector degenerating? Primarily the private sector had simply over accumulated due to the increasing accessibility to credit surrogating the redistribution of wealth. As we can see capacity utilization had become contingent on government spending, primarily on the military industrial complex. It was only three times in capitalism’s history that employment and capital came close to reaching their full capacity, and these had been strictly due to the effects of war; it was World War Two, the Korean war, and the Vietnam war that allowed rough maximization of the economy, in other words, war had become the main countercyclical policy of the United States. Government deficit spending temporarily overcomes the threat of stagnation when investment and consumption demand are curtailed by a capital strike, and due to the conceptual reluctance of supply-side theory, credit injections become the only rational way for capitalists to raise society’s demand. Keynes’s solution of taxing those who have a high propensity to save and redistribute the money to those with a high propensity to consume, but are collared by their low wages and destituteness of power relative to capital, makes complete economic sense, but lacks capitalist sense. Capitalist sense however would seem a contradiction in terms, considering economic theory is theory alone, capitalist economic sense is and always has been vulnerable to the unpredictable absurdity of capricious systemic dynamics.
When economic theory thought it finally understood that capitalism naturally grew thanks to the golden age, the achievement was presented to supply-side economics. By witnessing the golden age’s disposition where “recessions were mild, and after every setback investment bounced back at least as vigorously as during any comparable period in the earlier history of capitalism, the old orthodoxy of the unlimited demand for investment, which had been briefly challenged in the 1930s but never overthrown, simply reasserted itself as an unstated axiom of the new economics. The truth is that, apart from claims to be able to control the business cycle, the new economics is fundamentally no different from the old economics. And when the problems of the 1930s—the breakdown of the accumulation process, the onset of stagnation, the soaring of unemployment—began to reappear in the 1970s, the new economists showed themselves to be as helpless as their pre second World War ancestors.”6 One truth can be stated and that is capitalist economics is inherently obstinate supply side economics, which is best illustrated with the resurfacing of neoclassical economics following the golden age. Regardless of the changes and maturation capitalism had undergone in the golden age, economic grave robbers unearthed neoclassical market theory, and much like Frankenstein’s monster, this theory was brought back to life mutatis mutandis, however, it has always been in the nature of this resurrected theory to wreck economic and social havoc.
As the golden age ended with the economic slump of 1974, and as stagnation began to set in, a familiar theory began to reemerge, the theory of neo-liberalism. Neo-liberalism was largely reactionary to macroeconomic theory and the idea that the economy’s well being was determined largely on society’s welfare and ability to consume, distinguish by the fact that investment opportunities had withered and a transformative industrial revolution was not in sight. So what did the U.S economy look to? The government. “As stagnation set in during the 1970’s… a new pattern emerged: deficits not only became a fixed feature of the U.S. economy but kept growing in importance as a stimulating factor in the upward as well as the downward phases of the business cycle.”6 What this implicitly or explicitly shows is a crisis in the private sector. As a crisis with no end in sight, and with demand side economics an improbability, the situation was only exacerbated by the neo-liberal deregulatory, privatizing, and destabilizing orthodoxy. This was initially enacted by Jimmy Carter but most explicitly sanctioned by Reagan and his Reaganomics. “Reagan's fiscal program was fundamentally about tax cuts for the rich, a massive expansion in military spending, sharp reductions in social expenditures, and an acceptance-or better still, an embrace-of large-scale federal government fiscal deficits on these terms.”10 This fallacious orthodoxy of trickle down money injections, government safety netting of corporate embezzlement, and the drowning out of the production sector, under rational analysis shows quite clearly that bastard Keynesian economics amalgamated with neo-liberalism as an attempt to milk a failing economy.
All growth and expansion in our stagnating system is carried by ruthless appropriation of capital that would seem almost aware of its own mortality, and hence every time a new outlet of surplus is unearthed, it will be milked raw until stagnation can naturally resume its position. In other words, widespread capacity utilization rates will rise due to a breakthrough in growth (e.g. the automobile), but due to the ever-diminishing demand, capitalists will attempt at all costs to prolong the return to overcapacity in a frenzy of bad spending. The financial realm has chronically eschewed reality for the reason that this involution allows massive nominal capacity utilization. It was this nominal growth that allowed for a surplus under Clinton while social welfare continued to diminish. It was also under Clinton that government deficits came under great scrutiny as the problem behind stagnation. “The financial community and the academic experts began to focus on the deficit as the alibi for the economic slowdown. Private investment (and hence economic growth) was constrained, it was and still is claimed, because savings were insufficient to finance both the deficit and capital investment. The deficit was supposed to be crowding out the supply of funds that would other wise be used for capacity expansion and new jobs. But this was putting the cart before the horse. It was, in fact, the faltering of capital investment that set the stage for ever larger deficits and other government policies designed to fill the gap in effective demand.”6 Clinton was able to offset the deficit by allowing the financial sector to achieve salient growth regardless of real production and finding new international markets to liberate from the androgyny of autarky. It must be understood foremost that the growth under Clinton was primarily nominal and in reality a quite disastrous ‘growth’ that is still under a rehabilitation of deficit spending.
Of course it was not long after Clinton that the picaresque financial realm undermined itself and deficits once again came to the rescue. And this puts us right about to the current situation of an $8 trillion (and growing) government debt, sluggish economic growth, a trade deficit that hits record highs each quarter, “a $439.3 billion defense base budget—a 7-percent increase over 2006 and a 48-percent increase over 2001,”1 ten-fold increases in monopolized pharmaceuticals, global strife as neo-liberalism wipes its ass across already destitute countries, and larger and larger deficits required to stabilize the effective aggregate demand as neo-liberalism exacerbates the dissolution of capacity utilization and social welfare.
One thing that has yet to be clarified is the incredible trade deficit of the U.S. and this effect on the rest of the world. “Many economies (especially Japan and other Asian economies) have depended on expansion of exports to sustain economic growth and have been running large current account surpluses. Without the U.S. running large and rising current account deficits, the Asian surpluses have to be absorbed by other parts of the world. The subtraction of demand from the rest of the world could lead to devastating outcomes…however, as indispensable as the U.S. current account deficits are, the large and rising deficits lead to increasingly higher net foreign liabilities in relation to the U.S. GDP. Neither the deficits nor the foreign debt can keep rising forever.”5 The growing trade deficit beginning in 1976 is completely unheard of aside from the U.S. So what is the realistic solution to the government drawing with red ink for the last 30 years, and what will pay-back day entail? Robert Pollin’s theory explains that “closing fiscal deficits would entail some combination of two measures: 1) increasing taxes; or 2) cutting government spending. Given the reality of a Bush White House and a Republican-controlled Congress, we can be sure that the solution they would pursue would be spending cuts – and specifically cuts in social spending, not cuts in their priority projects, such as the occupation of Iraq or other imperial ventures.”9 Of course neither of these solutions looks probable nor desired. Raising taxes is out of the question under the neo-liberal agenda, as repercussions would consist of a massive downturn in aggregate demand along with a likely capital strike. It might even seem conceptually unintelligible to think of raising taxes under neo-liberalism not to mention an international armistice.
Pulling out of Iraq? A possibility for some modicum of foot soldiers, but seeing the importance of U.S. hegemony in keeping the value of the dollar up along with the ubiquitous military bases in every country the U.S. has been ever involved in “creating not an empire of colonies buy an empire of bases,”4 this option looks unrealistic. “The United States has used its power to force entry of its capital into nearly every country in the world. It has, in addition, achieved the enviable state of possessing the world’s primary currency—the U.S. dollar. This has allowed the United States to do what no other country can do: it can run persistent deficits in its balance of payments without the repercussions any other country would face.”3 Hence, an Iraqi armistice would undermine U.S. hegemony, as would any other concessionary action today, and threaten the value of the dollar, and considering military expenditures are getting closer to those of the cold war, curtailing them looks unlikely and irrational. So are we stuck with an ever-growing deficit? Likely, but it looks at if we will see a slight decline in deficit spending over the next couple of years, what must be remembered is this of course will come at the expense of social welfare.
Measured against the current economic alternatives, capitalism has come to be understood as the greatest system of growth and power, and it is, however, relative to the wealth and power of capitalism there is a severe deficiency of social welfare. As capitalism reached its mature monopoly stage in the great depression, two major factors offset the consequences of maturation that began to emerge in the 1930s, World War Two and the automobile. These two factors allowed capitalism to undergo the largest period of growth in its history offsetting the stagnation of the great depression. However, this golden age has been under a misguiding analysis. The perspective I have taken puts the golden age as an exception to the nature of capitalism, and among other things, the golden age was planting the seeds of disaster for the future. And it was Keynes, the “disinterested inquirer,” who knew we were all dead in the long run. So it might seem Keynes really did succeed relative to his ideology, he did temporarily offer a cure to the business cycle and stagnation, and however disastrous future remuneration would be, temporary amendment of the great capitalist annoyance was seen. The consequences to temporary amelioration however, did return with a vengeance.
Government spending since World War Two has been exponentially growing relative to what it takes in from taxes (aside from the abnormal surplus under Clinton).
Neo-liberalism as a reaction to the macroeconomics of the golden age has become analogous with Frankenstein’s monster, brought back to life, neoclassical economics with a liberal twist allows once again “restrictions on the property rights of capital… to be swept away”3 and social welfare to suffer the consequences. It was when remuneration/stagnation began to emerge from decades of bastard Keynesian economics that this reemergence of neoclassical economic theory, largely dependent on the idealized/romanticized Adam Smith local, non-conglomerate competitive market economy, cleverly christened neo-liberalism surfaced. At this point in time no outlets or investment opportunities could be found for the monolith of surplus and capital that had been built up, stagnation reemerged and all that follows accordingly, e.g. unemployment, little to no social welfare, no labor power relative to capital power, low wages and incomes, and general idleness in the economy. As the years succeeding the golden age drifted by and private investment steadily declined along with employment and capacity utilization, society came under threat. The “large-scale fiscal deficits create[d] persistent pressure for a permanent contraction in social spending by the federal government. The Nobel Laureate in Economics and right-wing economics guru Milton Friedman could not have been more blunt on this point, explaining in a 2003 Wall Street Journal article that deficits serve as “an effective I would go so far as to say the only effective restraint on the government propensities of the executive branch and the legislature." Remember the Reaganites, as with the Bush group, apparently experienced few qualms about throwing more money to the military while cutting taxes for the already overprivileged.”10 The new economics of free market competition characterized above, and the antipathy towards government is misleading, as it fails to see the true state of the economy.
The current mainstream lexicon of government deregulation being the catalyst of economic growth disregards the de facto role of the government, facilitators and financers of monopoly capitalism. This facilitation is no small endeavor and to believe the role of the government has been curtailed in order to unleash a plethora of anticipated growth previously restrained by lavishing state gridlock is groundwork for further speculation and exacerbation of an already unstable economy. Stagnation is ever present under capitalism and has been trivialized by cyclical upswings in the business cycle and nominal economic growth fueled by credit. Whenever stagnation threatens to reemerge, the panacea of war and military spending reemerges, that is, bastard Keynesianism reemerges. This constant revolutionizing of masking systemic failure has replaced the revolutionizing of capital necessary for true growth. This switch has been predominately facilitated by the financial realm of the government, by laxing monetary policy, fueling failing banks and industry, and bailing out bankrupted business. One very realistic diagram of the trouble the private business sector is facing is the growth of inflation measured by the consumer price index, which remained at a steady rate throughout the 18th and 19th century, even dropping at times, and now grows steadily and sharply. To relate to the opening quote, the current mature economic trends and tendencies show to be undermining themselves, the massive growth in the CPI, the degeneration of the private sector, the decades of red ink in government spending, the emergence of neo-liberal economics, and the massive dissolution of social welfare all persist to an extent unheard of. Are we in the final decay of capitalism, or can democracy prevail, and a completely new structure emerge, a flower in the wasteland? Yes.
A transition will prevail, however, not without difficulty. Humans require self-deception as Nietzsche would say, and the providence of deception is well nurtured by the ruling class, who are also, if not more deceived by their finite system. So how could a socially constituted psychology go about tackling the capitalist abstract individual? The conviction in the verisimilitude of capitalist mentality must be substantially countered by a cogent straightforward presentation of the current state and the prospective alternative state. If the ideas are lucid and organized, as to be understood by the most uneducated, unaware, right wing proletariat, compliance will easily follow. In the past transitional ideas have been clear to the more analytical, well-educated crowd, but this exclusive modus operandi must change. The ideas must comprehendible to a worker with little to no understanding of capitalist economics.
The development of economic socialism must be contingent with political socialism. As David Schweickart explains, “the capitalist class in a capitalist society is a privileged minority class. It is a stable minority class that possesses political power at least equal to that of elected officials and unmatched by any other stable grouping.”11 With the state bureaucrats largely regulated by the capitalist class social welfare has become the thorn in the foot of policy. A social reform is simply unintelligible under the current capitalist system, and as well as the outcome may look to an elected representative to promote, social welfare simply cannot be pursued to an effective length. Social welfare is simply not in the self-interest of anyone, or so is the belief, and it is this belief that curtails our already dearth comprehension of the alternative to “there is no alternative.” Do material conditions exist to make the necessary changes? Maybe not at the moment, but the time would seem ever ripening.
Where would the change take place first, the economy or the government, the mentality or the institutions that shape that mentality? If thought is contingent with labor and labor contingent on thought, and capitalism is deputed by idealism, then the shift from a dehumanizing, disenfranchising system to one more humane and free must come at the expense of temporary force. That is to say, the change in the control of the direction of thought must be institutionalized in lieu of the current capitalist/idealist system of manufacturing irrational consent. How would someone go about changing the direction of thought? Through changing the institutions that are currently working to control the sanction of a dehumanizing, irrational system, the system itself will begin to change, evolve, and develop accordingly. Manufacturing the consent of fear through counterfactual claptrap preached by the apologetics of neo-liberalism results in the comatose of institutional analysis. Creating and spotlighting relatively trivial matters, such as the exhaustion of social security funds, homosexuals, and abortion, the vulnerability of society’s mentality becomes further marginalized from the larger issues. The managers of the state apparatus along with the underlying corporate managers have succeeded in prolonging systemic analysis by revolutionizing the suppression methods of intellectual inquiry. Is it possible that the dynamics of innovation and constant revolutionizing of capital has been shifted to the revolutionizing of the belief of this orthodox? It would seem an acute analysis of the financial realm’s involution and divergence from real production juxtaposed with an analysis of the general ability to understand and follow this matrix of contingencies would reveal a proletarian consensus of confusion and alienation in a world beyond her control. “In the general population there is a sense of powerlessness, that there is just a big political machine out there that we can do nothing about.”8 This growing concessionary pessimism in the left’s mentality is largely fallacious, the lefts disillusionment with a projected reaction to a crisis in capitalism negates, what I believe, the tendency for humans to flourish and desire to flourish. This tendency may be suppressed and displaced by external forces, but the human nature of satisfaction has been pent up for a long time and the alternative to capitalism is quite rational. Show me humans that yearn to flourish, to be satisfied, to direct and execute their thought and labor but cant, and I shall show you capitalism.

mutually dependent destructive contradictions

Since the realization of China as a prospective global economic power and supply hub of monolithic labor potential, the United States has sought nothing less than unabated economic exploitation and domineering military containment. This strategy however, has become subject to emerging contradictions: namely, that the United States, since the abandonment of the Bretton-Woods agreement, has been dependent on its reserve holders to finance its stagnating economy and debt-driven consumption; and that dollar hegemony has become contingent on China’s faith and ability to artificially prop up the value of the dollar by keeping its domestic wages and rent suppressed. Further, the United States has long been losing legitimacy in its decision to unilaterally go about its imperial ambitions while also loosing de facto hegemony due to the economic and political growth of other nations. Essentially, the United States has entered a stage of economic involution where it funds its neoliberal mission by reaping the short-term benefits of a hegemonic fiat currency that only it can print at will. Though the United States blames China’s pecuniary policies for the U.S. trade and balance of payment deficit, the problem in fact lies in the contradictions inherent in financial capitalism. The fact that the United States economy is dependent on its ability to print unlimited dollars to finance its debt-driven economy and that this dollar hegemony is contingent on China being able to suppress its domestic social welfare to keep a growing foreign direct investment inflow to in turn buy more dollars, is the biggest threat to capitalism right now. What has ensued is a histrionic conflict of irrational addictions to poor economic policy. The United States is chastising China for keeping its currency artificially devalued while at the same time the United States is keeping its currency artificially overvalued. The true nature of the conflict stems from the United States inability to contain China through its international monetary and military institutions. China of course is the second largest economy and second largest holder of dollar reserves and holds the ability to trash the dollar and subsequently the U.S. economy at any time. However, the United States is the largest importer of Chinese goods and China’s economy—being export driven—is dependent on the United States ability to absorb all the Chinese goods being produced. Any slight alteration in the current trade situation will result in an economic crisis of both powers, a quagmire the United States has been attempting to avoid through its foreign policy towards containing China militarily. Since the trade situation is inherently limited, raising the living standards and fueling domestic demand by increasing income—not injecting credit—is in the long-term interests of both nations. Of course this would entitle severe economic reform, which due to mature capitalism’s conceptual inability to be driven by demand-side economics, must be structural.
The hegemony of the United States economic enterprise has, and always will be pillared by aggression and intervention. This is due to the corporate tycoons and financial barons who have forged this congruently with the maddening logic of capitalism. As the United States began developing an exchange-value economy in the early 20th century, a new kind of capitalism began to replace the old use-value industrial system. This new finance capitalism began eclipsing industrial capitalism following the reemergence of stagnation in the early 1970s. It was believed to be the most effective counter to stagnation. The financial sector of the economy, which had been moribund in the 1930s and under tight control throughout the war, experienced a vigorous growth during the next three decades. Between 1945 and 1975, while the GNP grew by a factor of 7.3 (reflecting price inflation as well as real growth), the debt of non-financial business firms and consumers increased 19 times, with the bellwether interest rate on 3-month treasury bills rising from 0.375 percent to 5.8 percent. Up to about 1960, this expansion of the financial sector was pretty much in step with, and basically resulted from, the long postwar upswing in the underlying economy. After that, especially under the stimulus of the Vietnam War, the financial sector began to grow more rapidly than the economy as a whole. It did this through an ever widening spectrum of negotiable financial assets including, commodities, foreign exchange, stocks and bonds, futures and options, options on futures and so on. The institutions that had been created following World War II, such as the International Monetary Fund, World Bank, and the international agreement to peg currencies to a gold standard, began to pose threats to the mobility of the latest state of capitalism, not to mention the cold (and often hot) war between the United States and the Soviet Union that further limited the global necessitation of capitalism. The United States was returning to the natural stagnating state of its economy and without a revolution in the exchange of capital, the capitalist nations might well have lost their legitimacy and ended up in a mutually assured state of destruction. Either this or the rise in nationalistic social economies would prevail as the most rational and democratic system to espouse, giving a true virtue to domino theory. As the ruthless destruction of Indo-China was coming to a head and the United States could no longer fight a conventional war in a guerilla climate, two milestones in capitalism were enacted: the abandonment in 1971 of the Bretton-Woods agreement of a gold standard and Richard Nixon’s trip to China in 1972.
With the desertion of the gold standard by Richard Nixon an entirely new hegemonic standard was set. By coercing the global financial system to denominate core commodities and currencies in dollars, the Federal Reserve began its reign as the dollar dictator. What dollar hegemony does is to transform the dollar-denominated payments imbalance of the United State into a dollar-denominated debt bubble in the US economy. Holders of US debt and assets are rewarded with high nominal returns provided by a high growth rate reflecting rising asset price denominated in money that constantly loses purchasing power. Through dollar hegemony, the United States, has been granted immunity from associated penalties of payments imbalance by having its trade deficit finance its capital account surplus. But instead of reforming the fundamental structure of the U.S. economy that creates such trade and fiscal deficits, many in the United States are seeking painless yet pointless solutions to a non-existent payments imbalance by engaging in irrational disputes over the issue of currency exchange rates of its trading partners, first Japan and Germany decades earlier, and now China. In essence, the repudiation of a fixed dollar freed US financial capital from insolvency but not inflation. It would be an economy with virtually little utility beyond fiat consumption that would be defined by nominal expansion and high liquidity—this would be the needed revolution in capital and finite panacea of stagnation. The year 1971 represented a structural landmark in capitalism. However, new dynamics necessarily brings new contradictions, and the ability of the Fed to print dollars at will, was certainly a landmark in contradictions that, through the neoliberal project, would come to affect the entire world creating a global dependency on the state of the U.S. economy especially for the growing economy of China.
Capitalism is a faith-based system that requires the unquestioning credence of all subjects. Capitalism creates an individualistic mentality based in the fear that the little I get today is better than nothing at all, and without my fealty I may get nothing tomorrow. This is the dilemma China faces with massive holdings in dollar reserves. Without a demand for fiat dollars the Chinese economy will be worthless. Dumping dollars for Euros, for example, would cause a dollar drain that could quickly develop into a downward spiral of every dollar holder to sell their reserves and buy Euros. What is holding China back from such an action is its economic dependency on the United States.
For 2005, Chinese foreign trade reached $1.3 trillion (81% of GDP of $1.6 trillion), with a global trade surplus of $102 billion (6.4% of GDP). About $100 billion of the Chinese trade surplus with the US went to pay for Chinese trade deficits with other countries. These figures show that trade is now a precariously excessive portion of Chinese GDP. And without a trade surplus with the US, China will face a global trade deficit of about 6.25% of GDP, more than the US’s 5.7%.
Fundamentally, the Chinese economy is more dependent on exports than the United States is on consumption. This is indicative of two major interrelated contradictions: that simply selling goods and services without taking in any is unsustainable in that the domestic economy will be drained; and, the social welfare of the population will be the expense of such policy.
It is uncontroversial that the disparity in wealth has been on a sharp rise, and though poverty has been declining the last 20 years, the concentration and centralization of wealth has been rising in dramatic contrast. China's income inequality has risen from 28 percent in 1981 to 41 percent today, while more than 400 million people were lifted above the $1 dollar a day poverty level in the last 20 years. What accounts for these numbers? Does this not seem contradictory? Before 1978, China was the most equal society in the world. An unofficial survey put the Gini index at 0.6 for 2005. According to the World Bank, the number of people living in poverty in China has declined from 480 million in 1981 to 88 million in 2002, but in 2003, poverty rose again for the first time since 1978, as the ill effects of excessive export became statistically discernable. This sheer starkness of inequality and wealth disparity is a direct result of neoliberal necessities. The United States needs the social welfare of its premier exporter of consumption to be exponentially suppressed; in other words, China’s dependency on U.S. consumption forces it to keep its social welfare in a secular state of disparity amidst an undervalued fiat currency to fuel its economy’s growth. The United States confronts this situation by condemning China on their fiat currency basis rather than their exploitative and draconian social disparity. This is because the United States knows that an appreciation in the Yuan would result in decline Chinese exports, which would further destabilize the Chinese economy causing a recession in aggregate demand and possible dollar reserve drains—the tipping point of a global economic crisis—due to market sentiments. Markets use exchange-rate fluctuation to carry the message of aggregate judgments to the monetary and fiscal authorities of the trading economies. These authorities, usually being the central bank and the Treasury, cannot ignore these market sentiments without a cost. For economies that practice exchange and capital control, the penalty would be a drain in foreign currencies and a reduction in trade in the case of a deficit, a cost neither China nor the United States is willing to risk. Hence, for the sort term, social welfare, reflected in living wages, health benefits, housing, and a clean environment will have to be put aside for the United States addiction to debt driven consumption and China’s addiction to exports.
For the United States to be the last-resort buyer—or de facto first-resort buyer—of foreign goods, it must pay for these imports through government expenditures. Now, government spending and its imbalances on payments have been on the rise since the 1950s when the transformative innovation of the automobile, reconstruction of Europe via Marshall Plan and pent up war time demand reached their finite limits. What government deficits indicate is cuts in social spending, and neoliberalism being a vampire of social spending and requiring more justifications for cutting social welfare than possible, thrives on government deficits. This is Reaganomics; run up government spending and say you cannot afford social spending. Essentially, since the end of the golden age, the United States economy has been in a state of secular stagnation and the only way to fight stagnation in a capitalist mentality is to either raise revenues or cut costs. And since raising revenues would require a raise in real aggregate demand which would raise costs in the short term, cutting profits, the only answer capitalists can come up in their myopic framework is to cut social spending. In Marxist terminology, capitalists must have an ever-growing surplus and this is done by either raising the absolute surplus value or the relative surplus value. And because capitalism has a tendency to stagnate, the relative surplus value tends to trump absolute surplus value. Now, to bring this back to the U.S. addiction to debt-driven consumption, neoliberalism conceptually cannot work from a demand side theory, hence, all real money injections are funneled to capitalists. This leaves credit injections left for the layman. Because the U.S. economy is on average 75% driven by consumption—now primarily of goods from China—there must always be people buying goods and services for the GDP to grow, just as there must always be goods to export for the Chinese economy to grow. This inherently is an unstable situation that leaves China and the United States (and the entire world) in a quite vulnerable state.
The United States recognizes this vulnerability and needs to create a raison d’etre for dollar hegemony. This justification is the military threat of and a responsive auxiliary security policy of militarization via ubiquitous overseas bases. The United States has spelled out the containment of China for some time now, but not until recently has the United States been so brazen in suppression of growing equals. China is the second largest economy following the United States and without question the premier adversary of the United States due to its virtual invincibility to an attack. Noted as the thesis of the National Security Strategy, the United States objective is to keep its unabated hegemonic role in the world and the security of this hegemon is contingent on the containment of any potential rivals. China has been growing on average nine percent for the last twenty years and every eight years China’s economy doubles with 600 percent increase in China’s trade just in the last twenty years. By the time George W Bush came into office, the pool of potential rivals had no doubt been narrowed in elite thinking to just one: the People’s Republic of China. Only China, it was claimed, possessed the economic and military capacity to challenge the United States as an aspiring superpower. Therefore perpetuating US global predominance meant containing Chinese power. Specifically, the 2006 National Security Strategy lays three unacceptable policies that China, if it wants to remain in a state of détente with the United States, must not pursue. These are:
• Continuing China’s military expansion in a non-transparent way;
• Expanding trade, but acting as if they can somehow “lock up” energy supplies around the world or seek to direct markets rather than opening them up – as if they can follow a mercantilism borrowed from a discredited era; and
• Supporting resource-rich countries without regard to the misrule at home or misbehavior abroad of those regimes.
These policies according the National Security Strategy, Quadrennial Defense Review, and the Defense Police Guidence if continued by China, will result in direct action by the United States.
The broad sweep of American strategy was first spelled out in the Pentagon's most recent policy assessment, the Quadrennial Defense Review (QDR), released on February 5, 2006. In discussing long-term threats to U.S. security, the QDR begins with a reaffirmation of the overarching precept first articulated in the DPG of 1992: that the United States will not allow the rise of a competing superpower. This country "will attempt to dissuade any military competitor from developing disruptive or other capabilities that could enable regional hegemony or hostile action against the United States," the document states. It then identifies China as the most likely and dangerous competitor of this sort. "Of the major and emerging powers, China has the greatest potential to compete militarily with the United States and field disruptive military technologies that could over time offset traditional U.S. military advantages" -- then adding the kicker, "absent U.S. counter strategies.
This is better know as the Bush doctrine: a reiteration of every doctrine since the meticulously chiseled end product of Woodrow Wilson’s liberal internationalism. Indeed, the Bush doctrine reaffirms that our democracy at home is contingent on our capitalism abroad; that is to say the welfare of business in the United States depends on the free unrestricted mobility of capital but not labor throughout the world. The United States is engaged to imperialism as a necessary response to the decline in profits and severe limits on domestic expansion. And what is seen now, is the world has its limits too. Capitalist driven hegemony is reaching its end; it has created a new world economy disheveled by the strongest and largest economy that is now experiencing blowback from its decades of capitalizing the world, China being just the latest expression of this. However, China is unique in that it currently serves as a labor hub with a reserve army more than twice the size of the United States population and is virtually indomitable against any U.S. military actions. In addition to China’s sheer abundant supply of raw human potential, it also holds a significant amount of US debt, enough to keep the United States in economic check. The United States is reacting to this dilemma with the steady encroachment and encirclement of China with military bases and its scrutiny of China’s monetary policy. Indeed, neither of these precautions will alleviate the contradictions inherent to the capitalist milieu.
The militarization option for the United States is overtly dichotomous in that it more than always exacerbates situations by creating new and more tumultuous contradictions. Neither will the assailment of China’s monetary policy succeed in ameliorating the economic quagmire; in reality this option is simply misguided economic calumny that is empirically counterproductive. The United States simply wants to push the exchange rate of the dollar further down to erode the value of the massive dollar holdings of its trading partners because the exchange of the dollar affects only those who live, operate in or visit non-dollar economies. But, because the Fed can print fiat dollars at will under dollar hegemony, a dollar-denominated U.S. trade deficit does not actually present a balance-of-payments problem for the United States. Thus, the U.S. trade deficit, not being a balance-of-payments problem, cannot be cured through manipulation of the exchange rate of the dollar. The only viable solution must come from reducing wage disparity between the two trading economies. The only solution for these contradictions lies in a systemic reformation sanctioning an adaptation of the organization of society. Looking ahead, there are ample reasons to think that it may well be more difficult for China to maintain its past rate of progress against poverty without addressing the problem of rising inequality. To the extent that recent history is any guide to the future, we can expect that the historically high levels of inequality found in many provinces today will inhibit future prospects for poverty reduction — just as we have seen how the provinces that started the reform period with (relatively) high inequality had a harder time reducing poverty. At the same time, it appears that aggregate growth is increasingly coming from sources that bring limited gains to the poorest. The low-lying fruits of efficiency-enhancing pro-poor reforms are getting scarce. Inequality is continuing to rise and the poor are becoming much more responsive to rising inequality. However, China has it in its power to make the Yuan an alternative reserve currency in world trade by simply denominating all Chinese export in Yuan. This sovereign action can be taken unilaterally at any time of China's choosing. All the State Council (the Chinese government's cabinet) has to do is to announce that all Chinese exports must be paid for in Yuan, making it illegal for Chinese exporters to accept payment in any other currencies. This would set off a frantic scramble by importers of Chinese goods around the world to buy Yuan at the State Administration for Foreign Exchange (SAFE), making the Yuan a preferred currency with ready market demand. There would no longer be a need for companies to exchange Yuan into dollars because the Yuan would be backed by the value of Chinese exports. An action like this would indefinitely ignite a bellicose response by the United States on both economic and military fronts. This is because the United States and China have become mutually dependent on each other’s contradictions and both hold it in their power to initiate a conflict of unprecedented scopes.
The true significance in the relations between China and the United States lies in the fact that contradictions of this scale prolonged will always bring calamitous consequences, and the sheer scope of neoliberal globalization is sure to result in an unparallel global debacle. What can be sought as a solution for the current disparity is a rise in living standards through higher wages and lower rents. The rise in living standards in all of Asia will change the path of history, restoring Asia as a center of advanced civilization, putting an end to two centuries of Western economic and cultural imperialism. In China, the most important path it can go down today is redistributive one, where the focus of money is being drawn to the working class. In addition, China must reform its environmental policies to slow the steady degradation of habitable environment. Of course any change in the environmental situation would have to follow a change in the capitalist industry sector. A reform in China’s monetary policies cannot bring long-term benefits to any class; China without a doubt must reverse its wealth inequality and the fact that China’s contradictions are only matched by U.S. financial symbiosis puts the social onus on both societies. Today the United States faces the inevitable manifestations of the largest intrinsic contradictions to the capitalist system and as these begin to unfold, the people must ask themselves if they will stand by and allow the world to sit under the sword of Damocles or take a position of solidarity for the sake of survival and fight the powers that be.

Building up to China

Since the Great Depression and more importantly since World War II, capitalism had come closer to its dissolution then ever before. When the world’s capitalist premiers had once again came to a head in conflict, this time in the midst of a global economic depression, the outright core rivalries and inner-feuds threatened the downfall of the capitalist system. However, as the United States emerged as the economic and political successor and sovereign of capitalism, the system had reached a point of global necessitation and had come under unparalleled contradictions and the mere state that capitalism had reached was now the largest threat to survival. What was seen in the following decades after World War II was an intensification and heading of capital becoming more and more limiting to capital. If Europe and Japan had been unable to reindustrialize and successfully earn dollars of its own, the United States capital investments would have defaulted and the domestic state of capitalism would have faltered allowing the natural state of stagnation to set in deeper than ever before. What inevitably stemmed from the volatile state capitalism was in following World War II was rational alternatives, for many optimists capitalism had finally reached its demise. Of course as we know the magnificent flexibility and assertion of capitalism allowed it to survive the difficulties of the last World War, however it would be these difficulties that would come to define global capitalism. In other words the cost of capitalism was going to be prolonged struggle for legitimacy and an ever-growing threat to world system capitalism. Never would the West witness tranquility in the world as long as capitalism defined international relationships.
The value of capitalizing Europe and Japan was implicitly and explicitly the defining point in U.S. hegemony and capitalist livelihood. The contradiction that ensued entailed Japan’s economic contingency on South East Asian production and labor, and Europe’s economic contingency on U.S. production and labor. The exceptional task of coercing the world into a comparative advantage economy required a massive re-crediting of capitalism that would prove impossible to achieve. Just as gold had given the dollar a value of faith and the flood of dollars required an annulment of the gold standard, capitalism was based in faith and ultimately tied to its subsidiaries to function as a legitimate system. The ground became increasingly unstable for capitalism as both Russian non-capitalism and independent nationalism began eclipsing the legitimacy of a world market led by a U.S. leviathan. Coercion became increasingly necessary through a military industrial complex and at last U.S. hegemony experienced a brief fleeting glimpse of success. However, the coerced legitimacy of capitalism has only created further contradictions and the U.S. is now faced with prospectus of another cold war, this time with China.

Recent Thoughts on Israel

The creation, sustainability and justification of the Jewish state of Israel are lined with core contradictions that will continue to destabilize and undermine the existence of the Zionist movement. These contradictions are the conceptual inability of Israel to withdraw from the post-1967 occupied territories due the concessionary implications of such an act and the growing consequential indications of an ethnocratic Jewish state in a land with a rich history of previous occupants. These contradictions are inherent in the dynamics of Zionist expansionism and are self-limiting in the fact that they undermine the philosophy behind the Zionist movement, to have a secure, stable exclusively Jewish state between Amman and the Mediterranean Sea.
The first contradiction, that withdrawal from the territories is unattainable, is due to the fact that such an action necessarily indicates the concession of Israel of the recognition of a Palestinian people and state. Granting statehood to the Palestinians would of course allow them an army and an international voice. Not only is Israel not going trivialize its own security but “In the framework of the relationship of forces existing since 1967 between the state of Israel and the fragmented Palestinian people, in the absence of any Arab and international support capable of changing this relationship, it was clearly not possible to obtain a complete and unconditional withdrawal of the Zionist army from the territories occupied in 1967. It was not possible, in other words, to realize the legitimate transitional objective, however illusory, of an independent and sovereign Palestinian state—in the true sense of the words, not in the caricatured, demagogic interpretation that Arafat has given them today.” The other solutions and subsequent contradictions Israel faces with the West Bank question is genocide or annexation of the territories. “The Zionists’ problem is that the Palestinians have learned the lesson of 1948 and have stayed put on their land. Violent expulsion of the Palestinians without any credible pretext was unthinkable, except for the crack-pots of the quasi-fascist Zionist far right represented in Shamir’s government. Annexation of the West Bank and Gaza Strip was impossible too, because granting Israeli citizenship to the inhabitants of these territories, which annexation would involve according to international law, would radically transform the ethnic composition of the state of Israel, putting its nature as a “Jewish State” in peril.” Hence the only viable option for Israel is constant occupation and creeping annexation without granting citizenship, i.e. the no state solution. Though the military did pullout of Gaza and the citizens of Gush Katif in 2005, this was of course a big loss for Israel and essentially shows signs of mere international acquiescence and distraction from the further expansion into the West Bank. Also, Israel could afford to disengage the Gaza Strip and 8,000 inhabitants of Gush Katif, it cannot however afford to pullout of the West Bank and settlements such as Gush Etzion or Ariel where some 400,000 settlers live, not to mention the aquifers where Israel gets its 350 liters per person a day of water. And, the fact that Israel continues its construction of both settlements and the wall show little progress on the West Bank question and trivialize any nominal commitments to lasting peace in the region on Israel’ behalf. This of course is nothing new and alludes to the greatest core contradiction of Israel never being a land without people for a people without a land.
From the onset when “Vladimir Ze’ev Jabotinsky proposed that an ‘iron wall’ of Jewish military power be built around Palestine to secure the land for the Jewish people, demand{ing} that within this wall a state be created immediately, without concern regarding compensation for the people currently living in the area” to the actual Nakba of 1948 the idea that Israel could enjoy a secure stable state where 690,000 people had current occupied was and remains the naïve mentality of Zionism. Though the Kibbutz movement of the early 20th century did in fact live peacefully with their Arab neighbors whom they had purchased plots of land from, the Nakba had changed everything and the expulsion and exodus of some 800,000 Arabs would not be forgotten and indeed create the pretext for Israel’s constant instability and reaffirmation of it’s raison d’etre. The constant coercion of the de juray existence of Israel and this acceptance as a fait accompli on behalf of the Palestinians creates a tumultuous dichotomy. On one part, the Palestinians acceptance of the credibility of Israel’s existence is a major concession in that it undermines the sheer existence of the Palestinian Liberation movement and representative organization. This same problem exists from the Israeli front; in its acceptance of the Palestinians existence it follows the acceptance of their dire living situation as a displaced people as a result of Israeli atrocities. Of course Israel is and always has been conspicuously elusive in their concession to the Palestinians by remaining ambiguous on their recognition and allowance of Palestinian self-determination on the international understanding of the situation, in fact Israel continues to reaffirm their expansionist objectives both nominally and physically. Of course Israel enjoys the advantage of this dichotomy, for Palestinians to even enter negotiations and win a credible international voice it must concede to Israel the acknowledgment of the Israel’s existence and right to exist securely. Of course empirically this security of existence has translated to tighter grips on Palestinians. Today this means more settlements, checkpoints, and further construction of the infamous trans-Israel highway, Road 6, and the 3 billion dollar, 730 km separation wall, Israel’s latest historically inept expression of negligence towards international law and human rights. Security for Israel tends to express itself dualistically as both expansion and expulsion and the latest attempt of security by means of wall is sure to bring repercussions unparallel to previous security strategies, for not only does this wall symbolize Israel’s contempt of peace, but also concision to the creeping expulsion policy of the majority of the Knesset. By not building this wall on the 1949 armistice line, which would have indicated a recognition of the Green Line as legitimate borders, and instead incorporating some 134,000 acres of land, Israel continues to show its objective of constant occupation of the territories. In fact Israel currently succeeds in its islanding of Palestinian villages in the West Bank where it has created the walled enclaves of Azzun ‘Atman, Qalqilliya, Al Jib, Al Judeira, Habla, Bir Nabala, Shu’afat, Anata, and Nu’man. As the attempts of Israel to suppress the Palestinian movement become increasingly desperate and draconian, so do the contradictions. By constantly giving greater impetus to the fundamentalist movement, as seen in the election of Hamas in 2005, it becomes apparent that Israel has very little concern for its long-term de facto security.
So what solution should be sought in the near future for Israel? Certainly not the one state solution, Israel has learned this lesson in the Six Day War and is constantly reminded of the population disadvantage in that the Palestinian birth rate exceeds the Israeli birth rate three fold, and certainly not the de juray two state solution that would necessitate the withdrawal of the West Bank and an existence of a legitimate Palestinian state. Though after extensive talk with Palestinians and Israelis the two state solution seems at this time unattainable, by incorporating the monolithic settlements in the West Bank with the wall, Israel has shit on any two state solution with mutual agreement. It seems the only option left is for Israel to pack up its ethnocratic utopian aspirations and recognize their atrocities and the fact that any long term lasting peace and stability can only come at the expense of their pathological racism, and for Palestine to pack up any utopian reaction and improvised explosives and enter diplomacy with Israel.