BY Stan Goff
Part 4
Earlier in this series, I said that money is not a fixed value. Actually, that is just an entre to the mysteries of money. Money is a (soul-less) form of communication. Money is a weapon. Money is a social solvent. And money is perceived differently based on context. This recognition of how money shape-shifts is essential to understand the phenomenon of political Islam… now seen in the popular US mind as the principle source of “terrorism,” and therefore our most urgent security threat.
The Market (TM) is an objectifying and homogenizing cycle of social existence. When everything has a price, then we have the peculiar duality that a pair of shoes, a ride on a Go Kart, a meal, or a pint of blood in the Emergency Room, are all qualitatively different things and at the very same time reducible to the same thing… different only in quantity. Price is a varying quantity of the same quality. If price were played on the piano, there would be no chords. One dollar: ding. Five dollars: ding ding ding ding ding. It only has one note.
As the complexity of our needs is subdivided into different points of production — away from us — then further subdivided into component tasks, the integration of life is shifted away from the individual and onto a grid of dependency. I am typing on a keyboard that was made somewhere (I don’t even know), looking at a monitor made somewhere else (because I don’t know how to make it, and wouldn’t have access [without adequate sums of money] to the things I need to do it), drinking coffee grown in Guatemala, that used fertilizer made somewhere else. I will eat in a moment, flour tortillas with meat and peppers (all made somewhere else). I took my medication last night before bed (don’t know where that was made) to offset symptoms probably created by dioxin exposure. I’m wearing heavy jeans to go to my job, where I will use tools made somewhere else. All this stuff costs money. I cannot maintain myself at this moment without money. I am dependent on money, deeply dependent; and therefore I am tied to the social grid where money dominates the most necessary interactions of people. The only thing in this house that wasn’t bought right now are the vegetables on my kitchen table that came out of my suburban organic garden (tomatoes, okra, bush beans, yellow squash, cucumbers).
This dependency is not merely economic. Money is a political phenomenon. It is printed by the government. It is called “legal tender” because it is the only thing the government will accept in payment of taxes; and if you refuse to pay taxes, the government can send armed people after you to either force you to pay the taxes or surrender some of your belongings (like your house) or put you in jail. If you physically resist, it is “legal” for the government’s armed representatives to injure or kill you. So when we “buy” something, even if we are unaware of it, we are engaging in a politically-determined action, an action backed up, as it were, by the threat of legitimated violence… by power.
Politics is the struggle for (and against) social power.
So money is political. Money facilitates dependency on money, and therefore on the political system that makes and controls the money. And money is perceived differently by those who don’t have it than those who do have it. Those who do have it, a lot of it, use it as a weapon and as an entitlement to the work of others as well as the possessions of others and as an entitlement to take things from nature. Money commands obedience. If you need money badly enough, you will consent to obey those who have the money you need. This is the definition of a job.
Money — as it becomes more general — is also a solvent. This is a key point from here forward.
Solvent: A substance, usually a liquid, in which other substances are dissolved.
It is no accident that having money on hand is called “being solvent” or that the availability of money to spend is called “liquidity.”
Yet we seldom think about what this implies culturally, ecologically, or politically. Because money represents “value” apart from the specific values of those things for which we exchange money, that is, abstract value, it is less fixed to time and space. Money transcends time and space by virtue of its abstraction. The evolution of money has been central to our social evolution, which cannot transcend space-time (since it is a real thing), but which can entitle certain people to appropriate space and time. Let’s unpack that.
Marx was the one who systematically looked at the implication of the difference between “use-value” and “exchange-value.” In front of me is a drinking glass. Its use-value is that it holds something I want to drink, and makes it portable. It’s a practical value, not in the least abstract. But it was made in a manufactory not so the people who made it could carry around drinks, but to exchange glasses for money: an price. If one person makes a drinking glass, and trades directly with another person for, say, a pencil or a comb of honey, then the exchange has been one of two use-values. This is also tied to place, or specific space-time. It is not reasonable to consider universalizing trades of glasses for pencils. This is why travel in barter economies is comparatively limited. The specificity of use-values tends toward localism. It also tends toward equality between traders. But people find advantages in the use of “universal equivalents,” or stores of value. It allows people to use one medium as an exchange-value for more than one practical value. That’s true if the exchange medium is red ochre, chickens, spondylus shells, or gold. The thing is, these three things, when they were used as “money,” had dual-use. They were stores of value because people also used them for decorations and other practical uses. The advantage as a universal exchange equivalent was that these things were recognizable and easily portable.
Moneys, however, can begin to generalize beyond single communities. This delocalization creates problems. In a kinship group or small community, culture mitigates toward very high levels of accountability to the group. People have to live together and cooperate to survive, after all. Once an exchange medium “transcends place,” where there are lower levels of communal accountability, there are diminishing disincentives to accumulating more than others. Since this universalizing exchange equivalent is, in essence, now seen as an entitlement to things in itself, this accumulation results in not only accumulation of things, but of social power. So the inverse tendency is: the more universal and abstract the exchange equivalent, the greater the ability of some individuals to exercise unaccountable social power. The mere possession of money, seen primarily now as a reservoir of (universal-abstract) value, allows the possessor to escape the local. Power begins to separate from kinship and accountability.
Increasing abstraction — gold, replaced by paper representing gold, then paper money standing for itself, then digital transfers of money-value without paper — is not the product of “globalization” (neoliberal imperialism). This abstracted money is the vehicle for the concentration and consolidation of unaccountable social power.
I said it allows the appropriation of space-time. A Haitian peasant takes six hours to walk from a mountain community to a riverine town. In six hours, I can leave my home by car, drive to the airport, board a plane, and fly to Minneapolis. Easy. Money not only bought my ticket, my car, and my gas; it allowed the construction of the airport and the planes, and facilitated the flow of materials from around the world to make those things possible.
The tendencies of money to dissolve cultural and natural systems are understood as two aspects of a single, ecosemiotic process… …the dissolution of cultural meaning and the dismantling of ecosystems are two aspect of the same process… …Abstract language, universalizing knowledge, general-purpose money, globalized commodities, and cosmopolitan personalities all share one fundamental feature: they are free to transcend specific, local contexts. They are not committed to place. There is thus an inverse relation between experiential depth and spatial expansion, between meaning investment and market shares. McDonald’s is testimony to the ecology of cultural diffusion.
(Hornborg, pp. 159-64)
dissolve… dissolution… diffusion
These all relate to the metaphor of solvents. We might even argue that this is more than metaphorical, and in ways descriptive.
This detour through money again is necessary to deepen our study of the historical antecedents of the current imperial crisis, and the security threats that are intrinsic to that crisis. National currencies are not perfect solvents, as it were, for global domination. A national currency is geographically (and politically) contained. It is only with a dominant currency that is held to be exchangeable with all others (while all others are held to less exchangeable or not exchangeable at all) that this ultimate solvent can do its magic.
More specifically, I need to return to the issue of dollar hegemony. American money is unique in many respects, because it is a dominant currency in the world. I will explore the details of this as we go along. The main point for now is that we Americans perceive US dollars far differently than, say, poor people in Saudi Arabia. The dollar is an exchange medium for us, as well as a dependency that makes us obey others, doing things we don’t generally like to do, because those others (called employers, or bosses) have the money we need to eat and sleep indoors, and even to buy things we have been convinced we must have to be whole, like iPods or Viagra or Cadillac Escalades. A poor Saudi sees dollars as a weapon used against him- or herself.
Most of the poor of the world, living in the global periphery (or semi-periphery), see dollars and the dependency on dollars as “against them.” They are correct in this perception. This entitlement to land, labor, and materials — held in great quantity by some against others — is a political weapon (an instrument that concentrates and consolidates unaccountable social power).
It is as if the workings of world capitalism protrude with the greatest clarity in its confrontation with peripheral populations actively trying to grasp its seemingly evil and unnatural forces. Until they submit to the objectifying stance of the market mentality, such population employ the religious or other metaphors that served to organize meaning in their precapitalist economies.
(Hornborg, p. 92)
The process that is commonly referred to as “globalization” (less commonly as neoliberalism) has made this social contradiction sharper, and this is at the root of our so-called “security issue.” This is also one root of this phenomenon called “political Islam.” Hold that thought; and now we’ll return to where we left off in our history lesson about developments since World War II.
We left off with the abrupt departure of Harry Dexter White from the Truman administration. Harry Truman had determined on a course of confrontation with the Soviet Union. The war had accomplished the deep integration of the machinofacture sector with the War Department, renamed the Department of Defense in 1949 as part of the emerging and Orwellian Cold War propaganda (you are under attack; we have to defend you).
This integration was not merely economic, it was social and cultural. A careerist’s revolving door was established between the Pentagon and industries with “defense” contracts; and even domestic policy assumed a posture of hyper-vigilance that would evolve into a full-blown national security state. This development was called the Truman Doctrine; and it included the official birth of the Central Intelligence Agency with all its covert operations mandates, as well as a nefarious law called The National Security Act, which we live with — unfortunately — to this day. The NSA also created the National Security Council (NSC), which is a standing committee from the Executive Branch that confers secretly and regularly as part of the NSA’s consolidation of the concentration of executive power that was a consequence of US participation in World War II.
No, it did not begin with George W. Bush.
Truman pursued Roosevelt’s Keynesian economic formula at home — a demand-production scheme that is designed to counter-balance the roller coaster ride of boom-and-bust, as well as build a firewall against speculative excess like that which was widely blamed for the Great Depression. The Security State needed stability, and something that looked like prosperity to a Depression-and-war-weary white majority was essential for this.
Returning to time-fractals and cycles of reality, however, the deeper dynamic that had led to the Great Depression — with uncontrolled speculative activity as the catalyst — was the core-periphery dynamic of an ever-more-integrated world system. Capitalism is fundamentally based on two dynamics in the sphere of The Market (TM): constant expansion and ceaseless competition. But our world is physical, and this competitive expansion requires physical inputs at exponentially increasing rates. Cores — which operate according to market-logic, a seemingly rule-based if amoral dynamic — are not rule-based in their relations to peripheries. Cores openly plunder peripheries where possible, and operate through rules only where rules facilitate plunder. Core nations cannot continue to accumulate capital without these peripheral inputs. This is the “core-periphery dynamic.”
Colonialism was the spread of this dynamic as cores, caught in the competitive-expansionary logic of capital accumulation, and forced to seek more everything-physical, from land and labor to guano and gold. The competition between core states for peripheral resources leads to inter-core, or inter-imperial, conflict. Inter-imperial conflict, on the other hand, provides unexpected opportunities to the people of the periphery to exploit that conflict. The first two modern revolutions in the Americas, the American and Haitian Revolutions, were made possible by the inter-imperial conflict between the British and French states.
The world wars of the 20th Century were an outcome of inter-imperial conflict; and both the Russian and Chinese Revolutions — each happening at the end of the two consecutive World Wars — exploited the weakening of the core states in this conflict to launch independent developmental courses.
At the end of World War II, the United States engaged in a new inter-imperial conflict. But it was not, as many assumed, between the US and the Soviet Union. The US attacks were against all former US allies, especially Great Britain. The Evil Empire caricature of the Soviet Union served as a foil for this conflict; but in a strange turn of fate — just as we are seeing with the US relation to political Islam today — the rhetoric of the Cold War Enemy created the reality of armed conflict.
Many find this hard to believe. Great Britain is our friend, no?
In fact, the “Anglo-American Loan Agreement” of 1945-6, which UK — broke from the war — was obliged to accept “spelled the end of Britain as a great power.” (Hudson, p. 269)
It was the Soviets who tried to warn UK about US intentions in 1945, but the best quote on this warning came in 1947 from The Economist, hardly a leftist sheet:
Not many people in this country believe the Communist thesis that it is the deliberate and conscious aim of American policy to ruin Britain and everything that Britain stands for in the world. But the evidence can certainly be read that way. And if every time that aid is extended, conditions are attached which make it impossible for Britain ever to escape the necessity of going back for still more self-abasement and on still more crippling terms, then the result will certainly be what the Communists predict.
So what was this “agreement”?
Britain’s empire and influence was consolidated with money. Specifically, the British pound-Sterling. Before World War II, the pound Sterling was still the favored world reserve currency, and nations under British occupation or influence had pegged their own currencies to the pound. This included most of South Asia, a huge band running from North to South Africa, and key states near the Persian Gulf.
We have just explored how money is a key lever of social power, more key as it is more universally accepted. Earlier we pointed out that the US entry into World War II was extremely calculated in the context of a global economic meltdown backgrounded by a competition for the exploitable peripheries. Franklin Roosevelt — as a very forward-thinking capitalist — knew that the US needed four things: (1) political stability at home (in the face of an upsurge of leftist politics in response to the Great Depression), (2) a unifying national project that would fuel the Keynesian restructuring (like a war), and (3) access to vast new peripheries as resource pools and markets, and finally (4) global monetary dominance. It is this cynical calculation that explains why UK, the rest of the Allies, the Soviet Union, and the German-Japanese “enemies,” all experienced otherwise anomolous treatment at the hands of the United States in the pre-war, war, and post-war period of a mere decade. The US was moving in as the new global boss.
In 1937, Britain controlled almost 20 percent of the world share of maufacturing, far more than the US. By 1941, the war that Britain had stumbled into with Germany had wiped out the British treasury, mostly paying Aemrican manufactories for war materiel. The UK switched in 1941 to a Lend-Lease scheme for these purchases to be paid for after the war; and therein subordinated itself to the US — a subordination that continues to this very day.
When the war was over, UK needed money badly, and it would have been permanently ruined if required to pay the full Lend-Lease debt. On the other hand, Bretton Woods was a de facto acquiescence to the dollar becoimng the new global currency, undermining the very financial basis of what was left of Britain’s now-shattered empire.
Joyce and Gabriel Kolko, writing in 1972 (The Limits of Power: The World and United States Foreign Policy, 1945-1954, p. 60), noted:
Britain’s share of the world market… far exceeded America’s and certainly would not diminish if the sterling bloc remained intact after the war. Even the dollar earnings of bloc members were not convertible to other currencies, leaving India, Argentina, and other large creditors fully integrated in the British trade system. England’s indebtedness, therefore, in its wartime form represented a very great threat to America’s postwar plans and to the Bretton Woods Agreement, which England had yet to ratify.
Not for long. The US made the Brits an offer they couldn’t refuse. Pay off Lend-Lease at 10-cents-on-the-dollar, and the US would float the loan to pay this 10 percent. The conditions? Sign Bretton Woods, and Gold-and foreign-currency-convertability for the sterling (which under Bretton Woods gold-dollar-peg system was tantamount to dollar access to the Sterling Zone). In signing, the UK also surrendered the right to autonomously devalue the pound (an important financial escape hatch).
The dollar had become King. (The loan was finally paid off last year! 2006!)
Britain’s former zones of influence would now pass to the US, or be placed under US observation. In this process, the UK — with a disoriented postwar foreign policy — began is disengagement with the Middle East. Palestine was partitioned between Arab Palestinians and the Euro-Jewish settler-expansionists of Ze’ev Jabotinsky’s Zionist movement. British forces had withdrawn from Iran in 1941, and in 1947 Britain withdrew its forces from Iraq and from Egypt back to the Suez Canal.
End Part 4
Stand by for Part 5
Posted by stan in Analysis