[Peace-discuss] banking bailouts *are* protectionism! from another fine Dean Baker article

[Morton K. Brussel]

This is a fine reflection, Ricky. Publish it!   --Mort

On Nov 15, 2008, at 5:00 PM, Ricky Baldwin wrote:

> It's an excellent point, Stuart.  And I think it *is* complicated.
>
> A generation or two, maybe more, have learned to pronounce  
> "protectionism" (even "intervention" in the context of the economy)  
> as if synonymous with "incest" or "child pornography", "free  
> enterprise" as if synonymous with "truth, justice and the American  
> way."  The truth is, capitalism doesn't actually *work* without  
> constant intervention, and it can't develop anywhere without  
> protection.
>
> It's not just the bailout - we do it *all the time*!  What are  
> copyrights, patents, trademarks if not protection?  Big tax breaks,  
> industrial development funds, TIFFs - are these "free" enterprise?   
> Does Wal-Mart move in without publicly funded roads, publicly  
> funded extensions of sewer lines - in some places water and  
> electric utilities and trash pickup (which ought to be public here,  
> too) - and in e.g. Urbana the gift of a new parking lot?
>
> What about all the gov't research - not just pharmaceutical, the  
> internet (the whole thing), not to mention TV, and innumerable  
> other 'hard' technologies, but also all that business development  
> "research" that universities like UIUC charge the taxpayer for and  
> then hand over gratis to 'investors'?  And what do *we* get out of  
> it?  That question seems to be lost in the cheerleading.
>
> It's not enough, we have to suppose, that capitalism itself is  
> always based on theft - land from indigenous peoples, labor from  
> slaves, resources from foreign lands whose governments we topple or  
> manipulate with debt or military aid or some such drug, or labor  
> again the full value of which the bosses never pay because if they  
> did they could never "profit" but only  trade.  No, that part  
> wasn't exactly easy - it took intensive and extensive support from  
> centuries of sympathetic gov'ts willing to fight wars, suppress  
> strikes and rebellions, execute "pirates", enforce the return of  
> escaped slaves, sign and break treaties, etc., etc. - but we have  
> it all behind us now, and more is required.
>
> I personally think we shouldn't be naive.  Most of us are not  
> primativists, much as we may respect Earth First! et al.  But if we  
> want a certain kind of society, a certain 'level of economic  
> development' (for lack of a better term) with high literacy and low  
> infant mortality and so on, OK, there's a price.  But that doesn't  
> mean Margaret Thatcher was right with TINA (There Is No  
> Alternative).  If 'progress' is what we want, we should go into it  
> with open eyes, sober, and say, all right, maybe certain types of  
> technology can't develop so well in individual garages and cottage  
> industries.  Or maybe there's a way to develop that kind of thing  
> down the road, once we make the initial public investments and so on.
>
> And maybe in the current economic web in which we find ourselves,  
> we can't allow huge chunks of the web to just collapse and take  
> hundreds of thousands of lives along.  The cost - and I mean the  
> human cost - of "letting them go" would likely be a humanitarian  
> disaster, though probably not as bas as some of the predictions.
>
> But the priorities need to be set socially, I think preferably in  
> some sort of democratic way, though most methods will have their  
> drawbacks.  We have to do our best.  Investments need to match  
> these social priorities: probably something like health, education,  
> sustainable energy, whatever - and I think some kind of  
> international relations that don't privilege the military solutions.
>
> Of course we're light years from anything like that, at least from  
> a system organized primarily along those lines.  Hard to imagine an  
> interview with an award-winning economist in the New York Times  
> saying this kind of stuff, without the word "satire" or  
> "entertainment" affixed somewhere.
>
> But the funny part is, most people like the sound of it.  Not  
> everybody, but most people.  We just don't believe it's possible.    
> Somewhere in the back of our brains millions and millions of heart- 
> of-hearts socialists, really believe in TINA, not in the sense of  
> believing in an ideal, but in the sense of believing in the law of  
> gravity.  There's an idea that it's hard-wired into a supposedly  
> immutable or at least biologically determined "human nature" that  
> is willing to entertain ideas of social justice mostly as whims and  
> fancies and is basically cutthroat.  It's junk-science, of course,  
> but even those of us who haven't fallen into this trap still can't  
> muster much hope for the kind of social revolution that could bring  
> about such things.
>
> I won't argue that right now - but just point out that it isn't all  
> or nothing.   We already *have* massive intervention in the economy  
> by every level of government.  What we have to do is pressure the  
> gov't on its priorities.  It's actually a very good time to do it,  
> too, confidence in capitalism being at a low, expectations of the  
> incoming government being high, and so on.  But without the  
> proverbial "heat from below" the system promises to recalcify  
> quickly, and intervention is likely to follow the model of  
> "socialized risk, privatized profit."
>
> Ricky
>
> "Only those who do nothing make no mistakes." - Peter Kropotkin
>
>
> From: Stuart Levy <slevy at ncsa.uiuc.edu>
> To: peace-discuss at anti-war.net
> Sent: Saturday, November 15, 2008 12:20:27 PM
> Subject: [Peace-discuss] banking bailouts *are* protectionism! from  
> another fine Dean Baker article
>
> We keep hearing from financial pundits & politicians
> about the need to avoid falling into the sink of
> protectionism.  Keep our markets free, etc.
>
> But Dean Baker's recent article points out that our
> bank bailouts -- which guarantee the stability of US and
> European banks, making them as safe as their governments --
> is exactly that, protectionism, and it puts the banks of
> other countries at an enormous competitive disadvantage:
>
>     http://www.truthout.org/111008D
>     "The G-20 and Biological Warfare", by Dean Baker
>
>
> [...]
>
> The G-20 will no doubt decide to make some aid, presumably through the
> International Monetary Fund, available to the countries being hit  
> by the
> fallout from Wall Street's financial meltdown. But this aid will  
> come with
> strings and likely not be sufficient to make these countries whole.
>
>     There is no easy remedy to this situation. But it should be  
> obvious to the
> developing world that the only way that they can protect themselves  
> from the
> episodic crises created by the rich countries is to have  
> alternative poles of
> financial support. Specifically, if they can establish regional  
> funds, as the
> South American countries have begun to do with the Bank of the  
> South, then they
> can hope to insulate themselves from the financial dealings and  
> misdealing of
> the wealthy countries.
>
>     Building up regional funds will not be easy. Countries will  
> have to make
> compromises and surrender some control to allow a regional fund to  
> operate
> effectively. In addition, the wealthy countries will go to  
> considerable lengths
> to prevent the creation of effective regional funds. The most  
> obvious route
> will be to invite a few important actors in the developing world to  
> sit among
> the wealthy countries as junior partners.
>
>     These tactics may prove successful. However, until the  
> developing countries
> can turn to alternative sources of capital, they will be  
> susceptible to every
> crisis resulting from the regulatory failures of the wealthy  
> countries, even if
> they had been completely responsible in managing their own  
> financial affairs.
> It's not fair, but that is the way the world works.
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