the official line almost everywhere is that the world

8/6/2019 The Official Line Almost Everywhere is That the World

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The official line almost everywhere is that the world-economy will look good again soon, if only we do this or that. Thefact is that no one -- neither governments nor megabanks nor even blinkered economists -- really believes this.

The world is in a depression, teetering on the edge of a really major crash. No one anywhere will be exempt from thenegative effects of this crash, even if a few lucky ones manage to make money out of it. The prime concern of everygovernment is not how to do well, but how to do less badly than other states.

The world press's attention has been focused on the very public debates in the United States, the Eurozone, and yesChina. But this doesn't mean that other states -- big or small, apparently growing or obviously stagnant -- are not equallyconcerned, if often less able to maneuver than the biggest players.

In July, amidst great drama, the Eurozone seemed to enact a political compromise of sorts. Wil l this enable theEuropean Union (EU) to do "less badly" than its many competitors? I think it may. But to see what really went on, wehave to move past the complicated economic decisions. No one seems to agree what was really agreed upon, and evenless whether this will do any good in terms of the economic dilemmas that the Eurozone countries face.

The compromise was political, not economic, and the major consequence will be political. What the Eurozone countriesmanaged to do was to save the euro as a single currency. Some think this marvelous; others a disaster. But the point isthat they saved it. And in terms of the ongoing geopolitical struggles in the world, this will enable Europe to remain amajor player.

Carsten Volkery, writing in Der Spiegel , summed up the decisions this way: "European leaders on [July 21] pushedthrough a second bail-out package for debt-stricken Greece, one which includes a surprisingly high level of privateparticipation. In addition, the Eurozone backstop has been given new powers, making it look suspiciously like aEuropean IMF."

The prior economic debate about the Greek debt (and that of other Eurozone countries) had all the standard ingredients.At one extreme were those preaching full faith in the "market" no matter what the consequences. The most extreme of these wanted to push Greece out of the Eurozone (although legally this seems almost impossible). At the other extremewere those preaching economic solidarity based on a neo-Keynesian emphasis on (re)creating effective demand -- a"mini-Marshall Plan."

The underlying political problem was the internal politics of different countries. A Keynesian solution was deeplyunpopular in Germany and Mrs. Merkel reasonably feared electoral disaster if she went along. A neo-liberal solutionrisked severe popular unrest in Greece, Spain, and eventually many other countries. The great compromiser turned outto be none other than France's Nicholas Sarkozy, who fought for the new powers given to the European FinancialStability Facility (EFSF) and celebrated publicly what he termed the beginnings of a European Monetary Fund. EvenMrs. Merkel agreed that the comparison was not implausible.

Mrs. Merkel won the concession she wanted -- involvement of private investors. And the European Central Bank (ECB)finally agreed to give its blessing too. The EFSF will issue its own bonds and those who hold Greek bonds can exchangethem for these new bonds, whose interest rates will presumably be lower. The IMF through its new director, ChristineLagarde, agreed that the effect of all this would be positive for everyone. Of course, this new arrangement allows theIMF to be less involved, at a time when its own resources are stretched. Even Great Britain, not a member of theEurozone, applauded the compromise.

Is this some kind of magic that will "save" Europe? Not at all. First of all, there are still players trying to undo thecompromise. The electoral consequences are yet to be seen.

Why did Sarkozy, the post-Gaullist heir of De Gaulle, become the architect of a compromise that moved Europe closer toa common governance structure? Two reasons really. On the one hand, after a series of political setbacks, it looks good,in terms of France's next elections, that Sarkozy has achieved something in foreign policy. The French polls indicate thathis ratings did in fact go up.

The second reason, however, is quite Gaullist. De Gaulle was opposed to more federalism in Europe because hethought it served U.S. interests at the expense of France's interests. But today, more "federalism" in Europe servesEurope's (and France's) interests at the expense of U.S. interests. A collapse of the Eurozone would have eliminatedwestern Europe as a major player in the interstate system -- and strengthened the dollar at a time that the dollar needsall the help it can get.

Voices on the left of the left constantly complain that the Eurozone is basically a neoliberal institution, protecting thebanks and hurting the little guys. This is largely true. What I have never understood is why anyone thinks the left woulddo better with a series of totally separate states. It seems to me that the neoliberal forces would be all the more powerfulif the European Union were to disappear.

The bottom line is that the EU and its Eurozone will do "less badly" in the major collapse that is coming soon. That'sperhaps not much of an achievement, but in the race to the lifeboats, Europe may be at least guaranteed to launch one.

Immanuel Wallerstein, Senior Research Scholar at Yale University, is the author of The Decline of American Power: TheU.S. in a Chaotic World (New Press).


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deemed dangerous. Of course, drones are notoriously hard to manipulate. There has been a great deal of "collateraldamage," to the constant and repeated protest of the Pakistani government. The second way was to pursue on its ownthe finally successful search for Osama bin Laden, without informing the official Pakistani authorities, whom the UnitedStates clearly did not trust not to leak information about the intended attack.

If the United States no longer trusts the Pakistani authorities, suspicion is even greater in the other direction. Pakistanhas one great guarantee of its security -- its nuclear weapons. As long as they have these, they feel defended against

India and against anyone else. They believe, quite firmly, that the United States would like somehow to take possessionof this stock. This is not entirely i rrational, in that the United States does fear that al-Qaeda, or other hostile forces, mightbe able to get access to these weapons and that the Pakistani government may not be a position to stop this. Of course,such a putative U.S. attempt to take control of the stock is far from a practical proposition. But there are no doubt peoplein the U.S. government who do think about this.

So now each side is playing its cards with each other. The United States is threatening to cut off, or drastically reduce,financial and military aid. The government is encouraged in this path by a U.S. Congress that is basically hostile to thealliance with Pakistan. Pakistan is retaliating by withdrawing the troops it had stationed on the Afghan border, making iteasier than ever for the Pakistan Taliban to send military aid to the Afghan Taliban. Pakistan is also reminding the UnitedStates that it has another powerful ally, China. And China is quite happy to continue to support Pakistan.

The weakness of Pakistan's regime is internal. Can it continue to control an increasingly anarchic situation? Theweakness of the United States is that it doesn't have any real options in Pakistan. Playing it really tough with thePakistani regime might undo its efforts to withdraw from Afghanistan (and Iraq and Libya) with minimal damage.


Copyright 2011 Immanuel Wallerstein -- distributed by Agence Global

Humala's Triumph in Peru: America's Defeatby Immanuel Wallerstein Released: 1 Jul 2011Ollanta Humala was elected President of Peru on June 5, 2011. The one sure loser in this election was the UnitedStates, whose ambassador, Rose Likins, scarcely hid her open campaigning for Humala's opponent in the secondround, Keiko Fujimori. What was at stake in this crucial election in Latin America?

Peru is a key country in the geopolitics of South America for a number of reasons: its size, its heritage as the locus of theInca empire, its locus as a fount of the Amazonia River, its ports on the Pacific, and its recent history as the site of amajor struggle between nationalist forces and pro-American elites.

In 1924, Victor Ral Haya de la Torre, a Peruvian intellectual and Marxist -- a quite unorthodox Marxist -- founded theAlianza Popular Revolucionaria Americana (APRA), which was intended to be a pan-American anti-imperialistorganization. APRA flourished in Peru, although it was severely repressed. What was original about APRA, unlike mostleft movements in the Americas, was its understanding that the majority of Peru's peasantry were indigenous Quechua-speaking peoples who had been systematically excluded from political participation and cultural rights. After 1945, APRAbegan to lose some of its radical edge but still had a strong popular base. Only the death of Haya de la Torre preventedhis election as President in 1980.

Peru's governments remained in conservative hands until 1968, when scandals over oil leases were the spark for amilitary coup by nationalist officers led by Gen. Juan Velasco Alvarado. They seized power and established aRevolutionary Government of the Armed Forces.

The Velasco government nationalized the oil fields, and then multiple other sectors of the economy. It invested heavily ineducation. More than that, it made it bilingual education, elevating Quechua to co-equal status with Spanish. Thegovernment launched programs of agrarian reform and import-substitution industrialization.

Its foreign policy moved sharply to the left. Peru cultivated good relations with Cuba, and purchased military equipmentfrom the Soviet Union. After Pinochet's overthrow of the Allende government in Chile in 1973, relations between Peruand Chile became tense. There was even talk of war when finally in 1975 Velasco was deposed by conservative militaryforces. And Peru thus ended its seven-year period of military-led nationalism with a left socio-economic program.

When Alan Garca, as leader of APRA, was elected President in 1985, he briefly renewed the left tradition by proposinga moratorium on external debt. But he was soon blocked in this effort, and then moved rightward to embrace neo-liberalism. Peru at this time faced several insurrections, the most famous of which was the Sendero Luminoso, whichbased its activity in the Andean regions of Quechua and Aymara peasantries.

In the 1990 elections, a now quite unpopular Garca faced the famous novelist and noted Conservative thinker andaristocrat, Mario Vargas Llosa, who ran on a purely neo-liberal economic platform. Unexpectedly, a little-known Peruvianof Japanese extraction, Alberto Fujimori, won in the three-way split. Fujimori's voting strength derived largely from voter


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rejection of the aristocratic style of Vargas Llosa.

Fujimori turned out to be a tough dictatorial type who successfully used the army to crush Sendero Luminoso as well asurban insurrectionary groups. To ensure his power, Fujimori did not hesitate to close down Congress, interfere with the

judiciary, and extend his second term. But the high degree of corruption and harsh rule led to his overthrow. He fled toJapan. He was later extradited from Chile, tried for his crimes in a Peruvian court, and sentenced to a long prison term.

His successor in 2001, Alejandro Toledo, continued the neoliberal program. And in 2006, Alan Garca again ran for president. He faced a former military officer, Ollanta Humala, who was openly supported by Hugo Chavez, support thathurt his prospects, as did attacks on his human rights record as an army officer. Garca won and continued and amplifiedthe neoliberal path. The economy flourished because of the world boom in mineral and energy exports. But the mass of the population was left out of the benefits. Typically, the government allowed transnational corporations to seize land inthe Amazonian region to exploit its mineral resources. The indigenous movements resisted, leading to a massacre inJune 2009, called the Baguazo.

It is in this last period that Peru became the focal point of two geopolitical struggles. One was between Brazil and theUnited States. Under Lula's presidency, Brazil had been struggling with considerable success to achieve SouthAmerican autonomy through the construction of regional structures like UNASUR and Mercosur. The United Statessought to counter Brazil's program by creating a Pacific Alliance of Mexico, Colombia, Chile, and Peru based on freetrade agreements with the United States. In addition, Colombia, Peru, and Chile launched a project for an integratedstock exchange, whose Spanish acronym is MILA. And Peru's armed forces actively linked up with the U.S. military'sSouthern Command.

The second geopolitical struggle was between China and the United States in the search for privileged access to SouthAmerica's mineral and energy resources. Peru once again was a key site.

What allowed Humala to win the election this time was three things. On the one hand, Humala turned openly andpublicly to a Brazilian social-democratic path. No longer any mention of Chavez. Humala met often with Lula and talkedof Peru's becoming a "strategic partner" of Mercosur.

The second critical element was the very strong endorsement he received from Vargas Llosa. Vargas Llosa, theconservative aristocrat, said it would be a catastrophe for Peru to elect Fujimori's daughter, who would release her father from prison, and continue his disreputable ways. Vargas Llosa caused a serious split in conservative forces.

The third critical element was the attitude of the Peruvian left, which had long had its reservations about Humala. AsOscar Ugarteche, a leading left intellectual, wrote for the Latin American press service, Alai-AmLatina, "for all of usHumala is a question mark but Fujimori is a certainty."

Ugarteche summed up the election by saying that "What is most significant about it, however, is the return of Peru toSouth America." We shall see how much Humala will be able to achieve internally in terms of redistribution and restoringthe rights of the indigenous majority. But the U.S. geopolitical counteroffensive, the Pacific Alliance, is undone.



The Coming Israeli Tsunami?by Immanuel Wallerstein Released: 15 Jun 2011The Palestinians are pursuing their project of seeking a formal recognition of their statehood by the United Nations whenthe General Assembly convenes in the fall. They intend to request a statement that the state exists within the boundarylines as they existed in 1967 before the Israeli-Palestinian war. It is almost certain that the vote will be favorable. Theonly question at the moment is how favorable.

The Israeli political leadership is well aware of this. There are three different responses that are being discussed bythem. The dominant position seems to be that of Prime Minister Netanyahu. He proposes ignoring such a resolutiontotally and simply continuing to pursue the Israeli government's present policies. Netanyahu believes that, for a very longtime, there have been resolutions adopted by the U.N. General Assembly that have been unfavorable to Israel, all of which Israel has successfully ignored. Why should this one be any different?

There are a few politicians on the far right (yes, there is an even further right position than that of Netanyahu) who saythat, in reprisal, Israel should formally annex all of the presently occupied Palestinian territories and end all talk of anynegotiations with the Palestinians. Some of them also want to force an exodus of non-Jewish populations from this

expanded Israeli state.

Former Prime Minister (and present Defense Minister) Ehud Barak, whose political base is now almost non-existent, is


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warning Netanyahu that he is being unrealistic. Barak says that the resolution will be a tsunami for Israel, and thattherefore Netanyahu would be wisest somehow to make a deal with the Palestinians now, before the resolution passes.

Is Barak right? Will this be a tsunami for Israel? There is a good chance that he is. There is however virtually no chancethat Netanyahu will heed Barak's advice and try seriously to make a deal with the Palestinians before then.

Consider what is likely to happen in the General Assembly itself. We know that most (maybe all) countries in Latin

America and a very large percentage of countries in Africa and Asia will vote for the resolution. We know that the UnitedStates will vote against it and try to persuade others to vote against it. The uncertain votes are those of Europe. If thePalestinians can get a significant number of European votes, their political position will be much reinforced.

So, will the Europeans vote for the resolution? That depends in part on what happens throughout the Arab world in thenext two months. The French have already hinted openly that, unless they see significant progress in Israel-Palestiniannegotiations (which are not even occurring at the moment), they will support such a resolution. If they do, it almostcertain that southern European governments will join them. So may the Nordic countries. It is a more open questionwhether Great Britain, Germany, and the Netherlands are ready to join them. If these countries do decide to go with theresolution, this may resolve the hesitations of various east European countries. In this case, the resolution would obtainthe vast majority of Europe's votes.

We need to look therefore at what is going on in the Arab world. The second Arab revolt is still in full swing. It would berash to predict exactly which regimes will fall and which will hold tight in the coming two months. What does seem clear is that the Palestinians are on the verge of launching a third intifada. The Palestinians, even the most conservativeamong them, seem to have given up hope that there can be any negotiated arrangement with Israel. This is the clear message of the agreement between Fatah and Hamas. And given that the Arab populations of virtually every Arab stateare in direct political revolt against their regimes, how could the Palestinians remain relatively quiet? They will not remainquiet.

And if they do not remain quiet, what will other Arab regimes do? All of them are having a difficult enough time, to saythe least, handling the uprisings in their own countries. Actively supporting a third intifada would be the easiest positionto take as part of the effort they are making to regain control of their own country. Which regime would dare not supportthe third intifada? Egypt has already moved clearly in that direction. And King Abdullah of Jordan has hinted that he toowould do so.

So imagine the sequence: a third intifada, followed by active Arab support for a third intifada, followed by Israeliintransigence. What will the Europeans then do? It is hard to see them refusing to vote for the resolution. We couldeasily arrive at a vote with only Israel, the United States, and a very few tiny countries voting against, and perhaps a fewabstentions.

This sounds like a possible tsunami to me. Israel's major fear for the past few years has been "delegitimization." Wouldnot such a vote precisely encrust the process of delegitimization? And would not the isolation of the United States in thisvote further weaken its position in the Arab world as a whole? What then will the United States do?



The President of the United States is considered to be the most powerful single individual in the modern world. WhatBarack Obama is learning to his chagrin is that he still has enormous power to do harm. But he has virtually no power todo good. I think he realizes this, and doesn't know what he can do about it. The fact is that there is very little he can doabout it.

Take his biggest single concern at the moment -- the second Arab revolt. He didn't start it. He was obviously taken bysurprise when it began, as was almost everyone else. His immediate response was to think, correctly, that it posed greatdangers to the already shaky geopolitical order in the region. The United States sought in every way it could to limit thedamage, maintain its own position, and restore "order." One can't say that the United States has been very successful.Every day in every way the situation has become more disorderly and beyond the control of the United States.

Barack Obama is by conviction and by personality the quintessential centrist. He seeks dialogue and compromisebetween "extremes." He acts with due reflection, and makes major decisions prudently. He is in favor of slow, orderlychange -- change that doesn't threaten the basic system of which he is not merely a part but the ordained central figureand most powerful single player.

He is today constrained on all sides from playing this role. Nonetheless, he continues to try to play it. He is obviouslysaying to himself, what else can I possibly do? What happens, as a result, is that other players (including those whowere once upon a time his subordinate allies) defy him openly, and shamelessly, and get away with it -- diminishing hispower further.

Netanyahu addresses the U.S. Congress, which enthusiastically and endlessly applauds his dangerous self-interestednonsense as though he were George Washington reincarnated. It was a direct slap in the face of Barack Obama, even


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though Obama had already, in speaking to AIPAC, withdrawn de facto his timid attempt to propose the 1967Israel/Palestine borders as the basis of a solution.

The Saudi government has made it very clear that it will do everything in its power to defend existing regimes in the Arabworld and is angry at Obama's occasional concession to "human rights" language. Pakistans government is tellingObama very clearly that, if it tries to be tough with it, they have a firmer friend in China. The Russian, Chinese, andSouth African governments have all made it very clear to Obama that, if the United States tries to get Security Council

action against Syria, it will not have their support and it probably couldn't get even a simple majority of votes -- echoes of Bush's failure in 2003 with the second Iraq resolution. In Afghanistan, Karzai is calling on NATO to stop drone attacks.And the Pentagon is feeling pressure to pull out of Afghanistan on the grounds that i t is too expensive.

Lest one think that U.S. weakness is exclusively a Middle East issue, take a look at Honduras. The United States hadvirtually endorsed the coup against now former President Zelaya. Because of the coup, Honduras was suspended fromthe Organization of American States (OAS). The United States then struggled hard to get Honduras restored to fullmembership in the OAS on the grounds that a new president had been formally elected. Latin American governmentsresisted this because Zelaya had not been allowed to return with all phony legal charges dropped.

What happened next? Colombia (supposedly the U.S.'s best friend in Latin America) and Venezuela (supposedly theU.S.'s nemesis in Latin America) got together and jointly arranged with the Honduran government in power Zelaya'sreturn under Zelaya's conditions. Secretary of State Clinton smiled wanly at this de facto rebuff to U.S. diplomacy.

Finally, Obama is in trouble with the U.S. Congress over the war in Libya. Under the War Powers Act, Obama wassupposed to be able to commit troops in Libya only for 60 days without explicit further endorsement by Congress. Sixtydays have now passed, and there has been no Congressional action. Continuing the Libyan action is clearly illegal, butObama is unable to get the endorsement. Nonetheless, Obama remains committed to the Libyan action. And U.S.involvement could escalate. So he can do the harm, but not the good.

Meanwhile, Obama is concentrating on getting re-elected. He stands a good chance of achieving this. The Republicansare moving further and further to the right, and politically they are no doubt overdoing it. But once re-elected, thepresident of the United States will have even less power than today. The world is moving on at a rapid pace. In a worldwith so many uncertainties and unpredictable actors, the most dangerous "loose gun" is turning out to be the UnitedStates.


Osama bin Laden was killed in Abbottabad, Pakistan on May 2, 2011, Pakistan time. He was killed by U.S. Seals forcesin a special operation ordered by the U.S. president. The whole world knows this, and reactions to this event have beenextremely diverse. But has this death changed anything anywhere? Does it matter?

The first question that most people are posing is whether this death signals the demise of al-Qaeda. It has become clear for some time that al-Qaeda today is not a single organization but rather a franchise. If Osama directly commanded anygroup, it was those located in Pakistan and Afghanistan. There are what seem to be autonomous structures callingthemselves al-Qaeda in other parts of the world, and notably in Iraq, Yemen, and the Maghreb. These groups have paidsymbolic homage to Osama but have made their own operational decisions.

In addition, the actual combative and political power of the various groups seems to have been in decline for some time.The most important reason for this has not been the killing of al-Qaeda leaders by the United States or other governments but the sense among most other Islamist forces that they could achieve more of their aims by more politicalroutes. The killing of Osama may inspire some immediate al-Qaeda attempts at "revenge" but it is not likely that this willdo much to slow down the growing irrelevance of al-Qaeda on a world scene.

Will the death of Osama change the situation in either Pakistan or Afghanistan? Pakistan's government was alreadyshaky before this. There is now public grumbling in both Pakistan and the United States about what did the Pakistanigovernment know and when did it know it. The Pakistani government's official line is that it knew nothing of Osama'slocation for about seven years in a villa next door to their main mili tary academy. And it also claims that it knew nothingin advance about the U.S. raid and deems it to have been an illegitimate infringement of Pakistani sovereignty.

Neither argument is very plausible. Of course it knew where Osama was living, or at least some Pakistani officials knew.How could they not? And of course, the U.S. government knew that Pakistan knew but wasn't telling them. This was allpart of the difficult, ambiguous relationship of the two allies for at least the last ten years. Will Osama's death changethat? I doubt it. The alliance remains mutually necessary.

As to whether the Pakistanis were informed of the pending U.S. raid, it depends on which Pakistanis. Clearly, the U.S.wanted to keep the raid secret from any one in Pakistan who might have interfered with it or alerted Osama. But did no-one know? We have two pieces of contrary information that have come out. The Guardian published a piece after Osama's death reporting, on the basis of conversations with U.S. and Pakistani officials, that former Pakistan PresidentMusharraf made an agreement with President George W. Bush in 2001, in which Musharraf agreed in advance to aunilateral U.S. raid on Osama whenever it located him, with the provision that the Pakistanis would denounce it publiclyafterwards. Musharraf now denies this but who believes him?


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Now he is doing much better in the campaigning. This is in part because of his strong positions on fiscal policies, but hispositions on the war are attracting attention. In addition, a new candidate has entered the ring. He is Gary Johnson,former Republican Governor of New Mexico. Also a libertarian, he is even stronger on the war issues than Paul.Johnson calls for total and immediate withdrawal from Afghanistan, Iraq, and Libya.

Given the wide spread of support for the various potential candidates, there are undoubtedly going to be televisionprograms where all the Republican candidates will speak and debate. If Johnson makes the war issue his big campaign

argument, this ensures that all the Republican candidates will have to address it.Once that happens, we will discover that the so-called Tea Party Republicans are deeply split on the war involvements.Suddenly, the whole of the United States will be debating this issue. Barack Obama will find that the centrist position hehas been trying to maintain has suddenly moved leftwards. In order to remain a centrist, he too will have to move left.

This will be a major turning-point in U.S. politics. The idea that the troops should come home will become a seriouspossibility. Some will fume with anger because the United States will thus be exhibiting weakness. And in some waysthis will be true. It is part of U.S. decline. What it will remind U.S. politicians, however, is that fighting wars requiresserious support in public opinion. And in this combination of geopolitical and economic pressures that everyone isfeeling, war-weariness is a very serious factor from here on in.


The Middle East: Allies in Disarrayby Immanuel Wallerstein Released: 15 Apr 2011For the last fifty years, United States policy in the Middle East has been built around its very close links with threecountries: Israel, Saudi Arabia, and Pakistan. In 2011, it is at odds with all three, and in very fundamental ways. It is alsoin public discord with Great Britain, France, Germany, Russia, China, and Brazil over its current policies in the region. Itseems almost no one agrees with or follows the lead of the United States. One can hear the agonizing frustration of thepresident, the State Department, the Pentagon, and the CIA, all of whom see a situation careening out of control.

Why the United States has created such an incredibly close alliance with Israel is a matter of much debate. But it is clear that for many years the relationship has been getting ever tighter, and more and more on Israeli terms. Israel has beenable to count on financial and military aid and the never-failing veto of the United States in the U.N. Security Council.

What has happened now is that both Israeli politicians and its U.S. base of support have moved steadily rightwards.Israel is holding on tight to two things: eternal delays on serious negotiations with Palestine and the hope that someonewill bomb the Iranians. Obama has been moving in the other direction, at least as much as U.S. internal politics will lethim. The tensions are high and Netanyahu is praying, if he does pray, for a Republican presidential victory in 2012. Thecrisis point may however come before that when the U.N. General Assembly votes to recognize Palestine as a member state. The United States will find itself in the losing position of fighting against this.

Saudi Arabia has had a cozy relationship with Washington ever since Pres. Franklin Roosevelt met with King Abdul Azizin 1943. Between them, they were able to control the politics of oil worldwide. They collaborated in military matters andthe United States counted on the Saudis to hold other Arab regimes in check. But today the Saudi regime feels highlythreatened by the second Arab revolt and is very upset by the willingness of the United States to sanction the dethroningof Mubarak by his military as well as by U.S. critiques, however mild, of Saudi intervention in Bahrain. The priorities of the two countries are now quite different.

In the era of the Cold War, when the United States regarded India as far too close to the Soviet Union, Pakistan obtained

the full backing of the United States (and China), whatever its regime. They worked together to aid the Mujahideen inAfghanistan and force the withdrawal of Soviet troops. They presumably were working together to stem the growth of al-Qaeda. Two things have changed. In a post-Cold War era, the United States has been developing much warmer relations with India, to the frustration of Pakistan. And Pakistan and the United States are in strong disagreement abouthow to handle the ever-growing strength of both al-Qaeda and the Taliban in Pakistan and Afghanistan.

One of the principal objectives of U.S. foreign policy since the collapse of the Soviet Union has been to keep westernEuropean countries from developing autonomous policies. But today, the three major countries -- Great Britain, France,and Germany -- are all doing that. Neither the tough line of George W. Bush nor the softer diplomacy of Barack Obamaseems to have slowed that down. The fact that France and Great Britain are now asking the United States to take amore active lead on fighting Gaddafi and Germany is saying just about the opposite is less important than the fact that allthree are saying these things very loudly and strongly.

Russia, China, and Brazil are all playing their cards carefully in terms of their relations with the United States. All threeoppose U.S. positions on just about everything these days. They may not go all the way (such as using vetoes in the

Security Council) because the United States still has claws it can use. But they are certainly not cooperating. The fiascoof Obama's recent trip to Brazil, where he thought he could get a new approach from President Dilma Rousseff -- but hecouldn't -- shows how little clout the United States has at present.


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Finally, U.S. internal politics have changed. The bipartisan foreign policy has slipped into historical memory. Now, whenthe United States goes to war as in Libya, public opinion polls show only about 50% support in the general population.And politicians of both parties attack Obama for being either too hawkish or too dovish. They are all waiting to pounce onhim for any reversal. What this may do is to force him to escalate U.S. involvement all over the place and therebyexacerbate the negative reaction of all the one-time allies.

Madeleine Albright famously called the United States the "indispensable nation." It is still the giant on the world scene.But it is a lumbering giant, uncertain of where it is going or how to get there. The measure of U.S. decline is the degreeto which its erstwhile closest allies are ready both to defy its wishes and to say so publicly. The measure of U.S. declineis the degree to which it does not feel able to state publicly what it is doing, and to insist that all is really under control.The United States actually had to cough up a very large sum of money to arrange the release from prison of a CIA agentin Pakistan.

The consequences of all this? Much more global anarchy. Who will profit from all of this? That, at the moment, is a veryopen question.



The entire Libyan conflict of the last month -- the civil war in Libya, the U.S.-led military action against Gaddafi -- isneither about humanitarian intervention nor about the immediate supply of world oil. It is in fact one big distraction -- adeliberate distraction -- from the principal political struggle in the Arab world. There is one thing on which Gaddafi andWestern leaders of all political views are in total accord. They al l want to slow down, channel, co-opt, limit the secondArab revolt and prevent it from changing the basic political realities of the Arab world and its role in the geopolitics of theworld-system.

To appreciate this, one has to follow what has been happening in chronological sequence. Although political rumblings inthe various Arab states and the attempts by various outside forces to support one or another element within variousstates have been a constant for a long time, the suicide of Mohamed Bouazizi on Dec. 17, 2010 launched a verydifferent process.

It was in my view the continuation of the spirit of the world revolution of 1968. In 1968, as in the last few months in theArab world, the group that had the courage and the will to launch the protest against instituted authority were young

people. They were motivated by many things: the arbitrariness and cruelty and corruption of those in authority, their ownworsening economic situation, and above all the insistence on their moral and political right to be a major part of determining their own political and cultural destiny. They have also been protesting against the whole structure of theworld-system and the ways in which their leaders have been subordinated to the pressures of outside forces.

These young people were not organized, at least at first. And they were not always totally cognizant of the politicalscene. But they have been courageous. And, as in 1968, their actions were contagious. Very soon, in virtually everyArab state, without distinction as to foreign policy, they have threatened the established order. When they showed their strength in Egypt, still the key Arab state, everyone began to take them seriously. There are two ways of taking such arevolt seriously. One is to join it and try thereby to control it. And one is to take strong measures to quash it. Both havebeen tried.

There were three groups who joined it, underlined by Samir Amin in his analysis of Egypt: the traditional and revivifiedleft, the middle-class professionals, and the Islamists. The strength and character of these groups has varied in each of the Arab countries. Amin saw the left and the middle-class professionals (to the extent that they were nationalist and not

transnational neoliberals) as positive elements and the Islamists, the last to get on the bandwagon, as negativeelements. And then there is the army, always the bastion of order, which joined the Egyptian revolt late, precisely inorder to limit its effect.

So, when the uprising began in Libya, it was the direct result of the success of the revolts in the two neighboringcountries, Tunisia and Egypt. Gaddafi is a particularly ruthless leader and has been making horrific s tatements aboutwhat he would do to traitors. If, very soon, there were strong voices in France, Great Britain, and the United States tointervene militarily, it was scarcely because Gaddafi was an anti-imperialist thorn in their side. He sold his oil willingly tothe West and he boasted of the fact that he helped Italy stem the tide of illegal immigration. He offered lucrativearrangements for Western business.

The intervention camp had two components: those for whom any and all military interventions by the West areirresistible, and those who argued the case for humanitarian intervention. They were opposed very strongly in the UnitedStates by the military, who saw a Libyan war as unwinnable and an enormous military strain on the United States. Thelatter group seemed to be winning out, when suddenly the resolution of the Arab League changed the balance of forces.

How did this happen? The Saudi government worked very hard and effectively to get a resolution passed endorsing theinstitution of a no-fly zone. In order to get unanimity among the Arab states, the Saudis made two concessions. Thedemand was only for a no-fly zone and a second resolution was adopted opposing the intrusion of any Western land


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forces.

What led the Saudis to push this through? Did someone from the United States telephone someone in Saudi Arabia andrequest this? I think it was quite the opposite. This was an instance of the Saudis trying to affect U.S. policy rather thanthe other way around. And it worked. It tipped the balance.

What the Saudis wanted, and what they got, was a big distraction from what they thought most urgent, and what they

were doing -- a crackdown on the Arab revolt, as it affected first of all Saudi Arabia itself, then the Gulf states, thenelsewhere in the Arab world.

As in 1968, this kind of anti-authority revolt creates strange splits in the countries affected, and creates unexpectedalliances. The call for humanitarian intervention is particularly divisive. The problem I have with humanitarian interventionis that I'm never sure it is humanitarian. Advocates always point to the cases where such intervention didn't occur, suchas Rwanda. But they never look at the cases where it did occur. Yes, in the relatively short run, it can prevent whatwould otherwise be a slaughter of people. But in the longer run, does it really do this? To prevent Saddam Hussein'sshort-run slaughters, the United States invaded Iraq. Have fewer people been slaughtered as a result over a ten-year period? It doesn't seem so.

Advocates seem to have a quantitative criterion. If a government kills ten protestors, this is "normal" if perhaps worthy of verbal criticism. If it kills 10,000, this is criminal, and requires humanitarian intervention. How many people have to bekilled before what is normal becomes criminal? 100, 1000?

Today, the Western powers are launched on a Libyan war, with an uncertain outcome. It will probably be a morass. Hasit succeeded in distracting the world from the ongoing Arab revolt? Perhaps. We don't know yet. Will it succeed inousting Gaddafi? Perhaps. We don't know yet. If Gaddafi goes, what will succeed him? Even U.S. spokesmen areworrying about the possibility that he will be replaced either with his old cronies or with al-Qaeda, or with both.

The U.S. military action in Libya is a mis take, even from the narrow point of view of the United States, and even from thepoint of view of being humanitarian. It wont end soon. President Obama has explained his actions in a very complicated,subtle way. What he has said essentially is that if the president of the United States, in his careful judgment, deems anintervention in the interests of the United States and the world, he can and should do it. I do not doubt that he agonizedover his decision. But that is not good enough. It's a terrible, ominous, and ultimately self-defeating proposition.

In the meantime, the best hope of everyone is that the second Arab revolt renews steam -- perhaps a long shot now --and shakes first of all the Saudis.


There is so much hypocrisy and so much confused analysis about what is going on in Libya that one hardly knowswhere to begin. The most neglected aspect of the situation is the deep division in the world left. Several left LatinAmerican states, and most notably Venezuela, are fulsome in their support of Colonel Qaddafi. But the spokespersonsof the world left in the Middle East, Asia, Africa, Europe, and indeed North America, decidedly don't agree.

Hugo Chavez's analysis seems to focus primarily, indeed exclusively, on the fact that the United States and westernEurope have been issuing threats and condemnations of the Qaddafi regime. Qaddafi, Chavez, and some others insistthat the western world wishes to invade Libya and "steal" Libya's oil. The whole analysis misses entirely what has beenhappening, and reflects badly on Chavezs judgment -- and indeed on his reputation with the rest of the world left.

First of all, for the last decade and up to a few weeks ago, Qaddafi had nothing but good press in the western world. Hewas trying in every way to prove that he was in no way a supporter of "terrorism" and wished only to be fully integrated

into the geopolitical and world-economic mainstream. Libya and the western world have been entering into one profitablearrangement after another. It is hard for me to see Qaddafi as a hero of the world anti-imperialist movement, at least inthe last decade.

The second point missed by Hugo Chavezs analysis is that there is not going to be any significant mil itary involvementof the western world in Libya. The public statements are all huff and puff, designed to impress local opinion at home.There will be no Security Council resolution because Russia and China won't go along. There will be no NATOresolution because Germany and some others won't go along. Even Sarkozy's militant anti-Qaddafi stance is meetingresistance within France.

And above all, the opposition in the United States to military action is coming both from the public and more importantlyfrom the military. The Secretary of Defense, Robert Gates, and the chairman of the Joint Chiefs of Staff, Adm. Mullen,have very publicly stated their opposition to instituting a no-fly zone. Indeed, Secretary Gates went further. On Feb. 25,he addressed the cadets at West Point, saying to them: "In my opinion, any future defense secretary who advises thepresident again to send a big American land army into Asia or the Middle East or Africa should have his headexamined."

To underline this view of the military, retired General Wesley Clark, the former commander of NATO forces, wrote an op-ed for the Washington Post on Mar. 11, under the heading, "Libya doesn't meet the test for U.S. military action." So,


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be sure, the popular forces are fighting back, and just now have been able to force the resignation of the Tunisian primeminister.

In the middle of the French Revolution, Danton counseled " de l'audace, encore de l'audace, toujours de l'audace ."("Audacity, more audacity, always audacity.") Good advice perhaps, but Danton was guillotined not long thereafter. Andthose who guillotined him were in turn guillotined. After that we had Napoleon, and then the Restoration, and then 1848,and then the Paris Commune. By 1989, at the Bicentennial, virtually everyone retrospectively was in favor of the French

Revolution, but one can reasonably ask if the trinity of the French Revolution -- liberty, equality, and fraternity -- have infact been realized.

There are some things that are different today. The wind of change is now truly worldwide. For the moment, theepicenter is the Arab world, and the wind is still whirling ferociously there. No doubt, the geopolitics of this region willnever be the same. The key places on which to keep one's eyes are Saudi Arabia and Palestine. If the Saudi monarchycomes under serious challenge -- and it seems at least possible that it will -- no regime in the Arab world will feel safe.And if the wind of change leads the two main political forces of Palestine to join hands, even Israel may feel it necessaryto adapt to the new realities and take account of Palestinian national consciousness, whether it likes it or not -- toparaphrase Harold Macmillan.

Needless to say, the United States and western Europe are doing everything in their power to channel, limit, and redirectthe wind of change. But their power is not what it used to be. And the wind of change is blowing within their very ownhome grounds. That is the way of winds. Their direction and momentum is not constant and therefore not predictable.This time the wind is very strong. It may not be so easy any more to channel, limit, and redirect it.



The World Social Forum (WSF) is alive and well. It just met in Dakar, Senegal from Feb. 6-11. By unforeseencoincidence, this was the week of the Egyptian people's successful dethroning of Hosni Mubarak, which finallysucceeded just as the WSF was in its closing session. The WSF spent the week cheering the Egyptians on -- anddiscussing the meaning of the Tunisian/Egyptian revolutions for their program of transformation, for achieving another world that is possible -- possible, not certain.

Somewhere between 60,000 and 100,000 people attended the Forum, which is in itself a remarkable number. To holdsuch an event, the WSF requires strong local social movements (which exist in Senegal) and a government that at least

tolerates the holding of the Forum. The Senegalese government of Abdoulaye Wade was ready to "tolerate" the holdingof the WSF, although already a few months ago it reneged on its promised financial assis tance by three-quarters.

But then came the Tunisian and Egyptian uprisings, and the government got cold feet. What if the presence of the WSFinspired a similar uprising in Senegal? The government couldn't cancel the affair, not with Lula of Brazil, Morales of Bolivia, and numerous African presidents coming. So it did the next best thing. It tried to sabotage the Forum. It did thisby firing the Rector of the principal university where the Forum was being held, four days before the opening, andinstalling a new Rector, who promptly reversed the decision of the previous Rector to suspend classes during the WSFso that meeting rooms be available.

The result was organizational chaos for at least the first two days. In the end, the new Rector permitted the use of 40 of the more than 170 rooms needed. The organizers imaginatively set up tents across the campus, and the meetingproceeded despite the sabotage.

Was the Senegalese government right to be so frightened of the WSF? The WSF itself debated how relevant it was to

popular uprisings in the Arab world and elsewhere, undertaken by people who had probably never heard of the WSF?The answer given by those in attendance reflected the long-standing division in its ranks. There were those who felt thatten years of WSF meetings had contributed significantly to the undermining of the legitimacy of neoliberal globalization,and that the message had seeped down everywhere. And there were those who felt that the uprisings showed thattransformational politics lay elsewhere than in the WSF.

I myself found two striking things about the Dakar meeting. The first was that hardly anyone even mentioned the WorldEconomic Forum at Davos. When the WSF was founded in 2001, it was founded as the anti-Davos. By 2011, Davosseemed so unimportant politically to those present that it was simply ignored.

The second was the degree to which everyone present noted the interconnection of all issues under discussion. In 2001,the WSF was primarily concerned with the negative economic consequences of neoliberalism. But at each meetingthereafter the WSF added other concerns -- gender, environment (and particularly climate change), racism, health, therights of indigenous peoples, labor struggles, human rights, access to water, food and energy availability. And suddenlyat Dakar, no matter what was the theme of the session, its connections with the other concerns came to the fore. This itseems to me has been the great achievement of the WSF -- to embrace more and more concerns and get everyone tosee their intimate interconnections.

There was nonetheless one underlying complaint among those in attendance. People said correctly we all know what


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we're against, but we should be laying out more clearly what it is we are for. This is what we can contribute to theEgyptian revolution and to the others that are going to come everywhere.

The problem is that there remains one unresolved difference among those who want another world. There are those whobelieve that what the world needs is more development, more modernization, and thereby the possibility of more equaldistribution of resources. And there are those who believe that development and modernization are the civilizationalcurse of capitalism and that we need to rethink the basic cultural premises of a future world, which they call civilizational

change.Those who call for civilizational change do it under various umbrellas. There are the indigenous movements of theAmericas (and elsewhere) who say they want a world based on what the Latin Americans call "buen vivir" -- essentially aworld based on good values, one that requires the slowing down of unlimited economic growth which, they say, theplanet is too small to sustain.

If the indigenous movements center their demands around autonomy in order to control land rights in their communities,there are urban movements in other parts of the world who emphasize the ways in which unlimited growth is leading toclimate disaster and new pandemics. And there are feminist movements who are underlining the link between thedemands for unlimited growth and the maintenance of patriarchy.

This debate about a "civilizational crisis" has great implications for the kind of political action one endorses and the kindof role left parties seeking state power would play in the world transformation under discussion. It will not be easilyresolved. But it is the crucial debate of the coming decade. If the left cannot resolve its differences on this key issue,then the collapse of the capitalist world-economy could well lead to a triumph of the world right and the construction of anew world-system worse even than the existing one.

For the moment, all eyes are on the Arab world and the degree to which the heroic efforts of the Egyptian people willtransform politics throughout the Arab world. But the tinder for such uprisings exists everywhere, even in the wealthier regions of the world. As of the moment, we are justified in being semi-optimistic.



One of the guiding mantras of the twentieth century was the self-determination of peoples, of nations. It was a piety towhich everyone assented in theory. But in practice, it was a very thorny, very murky subject. The key difficulty is how to

determine which was the self, the people, the nation that would be entitled to determine its own destiny.

There was never any accord on this subject. In the case of colonies, it was a relatively simple question. But in the caseof a state already recognized as a sovereign state, opinion was very divided, usually violently divided. The issue is in theheadlines at the moment because of the referendum in southern Sudan where the "people" are voting on whether theywish to remain part of the state called Sudan or to constitute a new state separate from Sudan.

In every state, without exception, there are people in state power who argue what we have come to call a Jacobinposition. They assert that all the citizens of that state constitute a nation, one that has already determined its destiny. Wetalk of nation-states as though the Jacobin principle were a reality rather than a political aspiration. Jacobins say that thestate should be reinforced and strengthened by refusing to recognize the right, the legitimacy of any so-calledintermediate group to stand between the state and the citizens. All rights to the individual; no rights to groups.

At the same time, in every state, again without exception, there are others -- often called "minorities" -- who contest thisidea. They say that the Jacobin position hides the interest of some "dominant" group which maintains its privileges at the

expense of all those who belong to groups other than the dominant group. The minorities (who often, but not always,comprise in fact the numerical majority of the population) argue that, unless the rights of groups are recognized, they aredenied equal participation in the state.

What "rights" do these minorities feel are being denied to them? Sometimes it is linguistic rights, the right to conductlegal, educational, and media business in a language other than the "official" language. Sometimes, it is religious rights,the right to practice openly a religion other than an officially recognized religion, and to conduct their civil affairs under the religious laws that are part of their own religion. Sometimes it is land rights, the rights of groups that hold land under traditional rules that are different from the current rules enacted by the state.

There are two strategies to secure the rights of minority groups. One is to seek officially-recognized autonomy in variousspheres of social and legal life. The second, if the group occupies a relatively compact geographical zone, is to seeksecession, that is, to create a new state. For many groups, these are alternatives between which they might move.Having failed to achieve autonomy, they might seek secession. Or having had their aspirations to secession defeatedpolitically and/or militarily, they might settle for autonomy.

The Kurds in Turkey as well as those in Iraq, having sought secession, seem now ready to settle for autonomy. So, itseems, will the francophones in Quebec. The people of the southern Sudan have moved in the other direction, as did theKosovars in Serbia.


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The crucial point is that this is not, ever, a question merely internal to a given state. To be a sovereign state, one mustbe recognized by other sovereign states as a legitimate entity. Today, the Turkish Republic of North Cyprus isrecognized by only one other state. It cannot therefore join international organizations, even if de facto it continues tocontrol its territory.

When Kosovo proclaimed its independence, it was recognized only by less than half of the members of the UnitedNations. We then have to ask why, and by which states? There were some states in Europe but also elsewhere (notably

China and Russia) who feared the precedent. They said that, if the Kosovars could declare unilaterally independence,similar groups in their countries might take this as a precedent. The United States and certain states in western Europethought however that Kosovar independence from Serbia served their geopolitical interest and encouraged the Kosovarsto proclaim their independence, which they immediately recognized, and to which they give material and politicalassistance.

When Biafra sought to secede from Nigeria several decades ago, almost all African states supported the efforts of theNigerian government to suppress the rebellion militarily. The main argument for doing this is that secession of Biafrawould set a terrible precedent in Africa where almost all state boundaries were constituted arbitrarily by former colonialpowers and in fact traverse ethnic lines. The African states wanted to preserve existing boundaries, however "artificial"they seemed, as the only guarantee of collective order.

Now, it seems that the referendum in southern Sudan will produce an overwhelming vote for secession. And the Africanstates that wouldn't recognize Biafra, plus China that won't recognize Kosovo, will almost certainly recognize the newstate that is now being created. Indeed, even the state from which the secession is taking place seems to be ready torecognize the new state.

Why? The answer is simple. There are geopolitical reasons for doing this. China is interested in good future relationswith the new state, which will be a big oil exporter. Interest in buying oil seems to be taking priority over worrying about aprecedent for secessionist groups in China. The Sudan seems ready to recognize the new state because the UnitedStates has promised specific changes in its own policies vis-a-vis Sudan if they permit the secession to proceedpeacefully. The African states are overwhelmed by the de facto accord between the two sides in this controversy. And inaddition, many of them sympathize with the groups in southern Sudan who are Nilotic peoples faced with a governmentdominated by Arab peoples.

In the twenty-first century, the Jacobin option is in retreat in most countries. The real question is autonomy versussecession for the so-called minorities. Is one better than the other? There is no general answer to that question. Eachcase is different in two ways. The actual demography and history of each state is different and therefore what is logicallybest and maximally just is different. In any case, any new state resulting from secession will immediately discover "minorities" within its boundaries. The debate never ends.

But there is a second consideration. Autonomy versus secession has geopolitical consequences. And these are crucialin terms of the ongoing struggles within the world-system as a whole. All parties pursue, rather cynically, their self-interest as states. How they act can be quite opposite from one situation to the other. This is because outside powersare primarily concerned with the geopolitical impact of the decision. But it is the role of these outside powers that is oftendecisive.



The media are telling us that the economic "crisis" is over, and that the world-economy is once more back to its normal

mode of growth and profit. On December 30, Le Monde summed up this mood in one of its usual brilliant headlines: "TheUnited States wants to believe in an economic upturn." Exactly, they "want to believe" it, and not only people in theUnited States. But is it so?

First of all, as I have been saying repeatedly, we are not in a recession but in a depression. Most economists tend tohave formal definitions of these terms, based primarily on rising prices in stock markets. They use these criteria todemonstrate growth and profit. And politicians in power are happy to exploit this nonsense. But neither growth nor profitis the appropriate measure.

There are always some people who are making profit, even in the worst of times. The question is how many people, andwhich people? In "good" times, most people are seeing an improvement in their material situation, even if there areconsiderable differences between those at the top and bottom of the economic ladder. A rising tide raises all ships, asthe saying goes, or at least most ships.

But when the world-economy becomes stagnant, as the world-economy has been since the 1970s, several things

happen. The numbers of people who are not gainfully employed and therefore receiving an income that is minimallyadequate goes up considerably. And because this is so, countries try to export unemployment to each other. In addition,politicians tend to try to deprive the elderly retired persons and the young, pre-working-age persons of income in order to


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appease their voters in the usual working-age categories.

That is why, appraising the situation country by country, there are always some in which the situation looks much better than in most others. But which countries look better tends to shift with some rapidity, as it has been doing for the lastforty years.

Furthermore, as the stagnation continues, the negative picture grows larger, which is when the media begin to talk of

"crisis" and politicians look for quick fixes. They call for "austerity," which means cutting pensions and education andchild care even further. They deflate their currencies, if they can, in order that they reduce momentarily their unemployment rates at the expense of some other country's employment rates.

Take the problem of government pensions. A small town in Alabama exhausted its pension fund in 2009. It declaredbankruptcy and ceased paying its pensions, thereby violating state law which required it to do so. As the New York Times remarked, "It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the lawand pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases,or make huge service cuts, to come up with the money. Current city workers could find themselves paying into a pensionplan that will not be there for their own retirements."

But this is the looming problem for every state within the United States who, by law, must have balanced budgets, whichmeans they cannot resort to borrowing to meet current budgetary needs. And there is a parallel problem for every nationwithin the euro zone who cannot deflate their currencies in order to meet their budgetary needs, which has meant thattheir ability to borrow leads to exorbitant unsustainable costs.

But what, you may ask, about those countries where the economy is said to be "booming" such as Germany and mostparticularly, within Germany, Bavaria - called by some "the planet of the happy." Why then do Bavarians "feel a malaise"and seem "subdued and uncertain about their economic health"? The New York Times notes that "Germany's goodfortune...is widely viewed (in Bavaria) as having come at the expense of workers, who for the past decade havesacrificed wages and benefits to make their employers more competitive....In fact, part of the prosperity comes frompeople not getting the social security they should have."

Well then, at least, there is the good example of the "emerging economies" which have been showing sustained growthduring the last few years -- especially the so-called BRIC countries. Look again. The Chinese government is veryconcerned about the loose lending practices of Chinese banks, which seem to be a bubble, and leading to the threat of inflation. One result is the sharp increase in layoffs in a country where the safety net for the unemployed seems to havedisappeared. Meanwhile, the new president of Brazil, Dilma Rousseff, is said to be disturbed by the "overvalued"Brazilian currency amidst what she sees as the deflating U.S. and Chinese currencies that, together, are threatening theability of Brazilian exports to be competitive. And the governments of Russia, India, and South Africa are all facingrumbling discontent from large parts of their populations who seemed to have escaped the benefits of presumedeconomic growth.

Finally, and not least, there are the sharp rises in the prices of energy, food, and water. This is the result of acombination of world population growth and increased percentages of people demanding access. This portends astruggle for these basic goods, a struggle that could turn deadly. There are two possible outcomes. One is that largenumbers of people will reduce the level of their demand -- most unlikely. The second is that the deadliness of thestruggle results in a reduced world population and thereby fewer shortages -- a most unpleasant Malthusian solution.

As we enter this second decade of the twenty-first century, it seems improbable that by 2020 we shall look back on thisdecade as one in which the "crisis" was relegated to a historical memory. It is not very helpful to "wish to believe" in aprospect that seems remote. It does not help in trying to figure out what we should do about it.



Prime Minister Vladimir Putin of Russia visited Germany in the end of November. Before arriving there, he published anop-ed in the German newspaper, Sddeutsche Zeitung , which commented on this interview under the headline, "Putinhugs Europe."

The contents of the op-ed were quite remarkable. Putin said that the lesson to be drawn from the severest economiccrisis of the world economy in eight decades was the need for Russia to work more closely with the European Union."We propose the creation of a harmonious economic community stretching from Lisbon to Vladivostok." He said that "inthe future, we could even consider a free trade zone or even more advanced forms of integration." He suggested thatsuch a continental market would be worth trillions of euros.

Putin suggested that the EU and Russia needed to work closer together in the fields of industry and energy. He said thatthey should consider "what we can do to enable a new wave of industrialization on the European continent." Hementioned such fields as shipbuilding, the airplane and automobile industries, environmental technologies,pharmaceuticals, nuclear energy, and logistics. He called for common undertakings by European and Russianentrepreneurs.


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discovered "poverty." They not only discovered poverty, but they set out to provide programs to "reduce" the amount of poverty in the global South. It is worth understanding their logic.

The IMF publishes a sleek quarterly magazine called Finance & Development . It is not written for professionaleconomists but for the wider audience of policymakers, journalists, and entrepreneurs. The September 2010 issuefeatures an article by Rodney Ramcharan whose title tells it all: "Inequality Is Untenable."

Rodney Ramcharan is a "Senior Economist" in the IMF's African Department. He tells us -- the new IMF line -- that"economic policies that simply focus on average growth rates could be dangerously naive." In the global South, highinequality can "limit growth-enhancing physical and human capital investments and increase calls for possibly inefficientredistribution." But even worse, high inequality "giv[es] the rich a relatively greater voice than the less homogeneousmajority." And this in turn "can further skew the income distribution and ossify the political system, leading to even graver political and economic consequences in the long run."

It seems the IMF has finally heard Kissinger. They have got to worry about both the unwashed masses, especially incountries of high inequality, and of their elites, who also delay "progress" because they want to maintain their hold onunskilled labor.

Has the IMF suddenly become the voice of the world's left? Don't be silly . What the IMF wants, as do the world's moresophisticated capitalists, is a more stable system in which their market interests prevail. This requires twisting the armsof elites in the global South (and even in the global North) to give up a little of their ill-gotten gains in "poverty" programsthat will appease enough of the ever-expanding poor to calm their thoughts of rebellion.

It may be too late for this new strategy to work. The chaotic fluctuations are so very great. And "untenable inequality" isgrowing daily. But the IMF and those whose interests it represents are not going to stop trying.


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Le Monde diplomatique

The Nation

Richard Bulliet

Rami G. Khouri

Peter Kwong

Patrick Seale

Immanuel Wallerstein

Currency War? Of Courseby Immanuel Wallerstein

Released: 1 N

Currencies are a very particular economic problem. For currencies are the one true win-lose relationship. Whatever the merits of revaluinga particular currency, these merits are only wins if others are losers. Everyone cannot devalue simultaneously. It is logically impossible and

politically meaningless.The world situation is well-known. We have been living in a world in which the U.S. dollar has been the world's reserve currency. This of cogiven the United States a privilege that no other country has. It can print its currency at will, whenever it thinks that doing so solves some imeconomic problem. No other country can do this; or rather no other country can do this without penalty as long as the dollar remains the accreserve currency.

It is also well-known that the dollar has been losing i ts value in relation to other currencies for some time now. Despite the continuing fluctucurve has been downward for perhaps thirty years at least.

The countries of northeast Asia -- China, Korea, and Japan -- have pursued currency policies that other countries have criticized. Indeed thisubject of constant media attention. However, to be fair, it is by no means easy to establish the wisest policy at the moment, even from theperspective of each country.

I consider the underlying issue simpler than the convoluted explanations of most policy analysts. I start with a few assumptions. The statusas the reserve currency of the world-system is the last major advantage that the United States has in the world-system today. It is thereforeunderstandable that the United States will do what it can to maintain this advantage. In order to do so, it requires the willingness of other co(including notably those of northeast Asia) not only to use the dollar as a mode of calculating transfers but as something in which to invest tsurpluses (particularly in U.S. treasury bonds).
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However, the exchange rate of the dollar has been steadily slipping. This means that surpluses invested in U.S. treasury bonds are worth legoes by. There comes a point at which the advantages of such investment (the principal advantage being that it sustains the ability of U.S.and individual consumers to pay for imports) will eventually be less than the loss of real value of the investments in the treasury bonds. Themove in opposite directions.

The problem is one which is posed in any market situation. If the value of a stock is falling, owners will want to divest before it becomes too

rapid divestment by a large stockholder can impel a rush to divest by others, thus causing even greater losses. The game is always to find tmoment to divest that is neither too late nor too soon, or not too slowly but not too fast. This requires perfect timing, and the search for perfethe kind of judgment that quite frequently goes awry.

I see this as the basic picture of what is happening and will happen with the U.S. dollar. It cannot continue to maintain the degree of world cthat it once enjoyed. Sooner or later, economic reality will catch up with it. This may happen in a five-minute shock or in a much slower procwhen it does, the key question is, what then happens?

There is no other currency today poised to replace the dollar as a reserve currency. In that case, when the dollar falls, there will be no reser We shall be in a multipolar currency world. And a multipolar currency world is a very chaotic world, in which no one feels comfortable becauconstant swift shifts of exchange rates make minimally rational short-term economic predictions very precarious.

The managing director of the International Monetary Fund, Dominique Strauss-Kahn, is at the moment warning publicly that the world is plucurrency wars, whose outcome "would have a negative and very damaging longer-run impact." One real possibility is that the world may revseems to me is already reverting, to de facto barter arrangements - a situation that is not really compatible with the effective functioning of aworld-economy.

Caveat emptor!

Immanuel Wallerstein, Senior Research Scholar at Yale University, is the author of The Decline of American Power: The U.S. in a ChaoticPress).


by Immanuel Wallerstein Released: 15 Oct 2010It is no secret that a lot of countries think they have interests in who governs Afghanistan. And, over the past thirty years,a lot of countries have been sending troops or military hardware or a lot of money in order to get the kind of governmentin Afghanistan they prefer.

It is not hard to show that the degree to which outsider countries have in fact gotten their way is very limited. And theprospects don't look good for the outsiders. There is an increasing sense among outsiders that perhaps they shouldreduce their active involvement. Intrusion creates a burden that doesn't seem to have too many rewards.

The Soviet Union was burned badly in the 1980s and finally withdrew its troops completely. The president they thoughtthey were sustaining was hanged publicly by a grateful nation. The mujahideen that the United States supported in their resistance to Soviet intervention showed their gratitude by breeding and supporting a movement, al-Qaeda, which hasever since devoted its energies to a jihad against the United States and all those whom al-Qaeda considers allies of theUnited States.

The Afghan civil war, which has had more than two sides, has continued unceasingly during all this time. One major force, called the Taliban, has had its ups and downs during these wars. Currently, they seem to be on a considerableupswing again. Since almost all the outsiders, except Pakistan, endlessly repeat their negative views about the Taliban,the ability of the Taliban to persist and to gain ground within has led to a lot of private rethinking among all concernedoutside countries. The question should we continue to be involved? is on the agenda everywhere.

The neighbors to the north and west -- Uzbekistan, Tadjikistan, Russia (although it has no direct border), and Iran -- allare concerned. They do not want a government dominated by militant, largely Pashtun, Taliban in power. They fear,probably correctly, that it would oppress in various ways the zones in the north and west which are ethnically tied to their countries. But none of these neighbors seems ready to send in troops. All therefore favor some intra-Afghan politicalnegotiations that would end up with some protection of the zones in the north and the west.

The United States currently has a large number of troops in Afghanistan. It is theoretically committed to begin awithdrawal of such troops by July 2011. In theory too, the United States government is hoping for a defeat, or at least ataming, of the Taliban forces, and a strengthening of the official Afghan army under the authority of the formally legalgovernment presided over by President Hamid Karzai.


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What do these two elections tell us about the future of social-democracy? Social-democracy -- as a movement and anideology -- is conventionally (and probably correctly) traced to the "revisionism" of Eduard Bernstein in late nineteenth-century Germany. Bernstein argued essentially that, once they obtained universal suffrage (by which he meant malesuffrage), the "workers" could use elections to win office for their party, the Social-Democratic Party (SPD), and takeover the government. Once they won parliamentary power, the SPD could then "enact" socialism. And therefore, heconcluded, talk of insurrection as the road to power was unnecessary and indeed foolish.

What Bernstein was defining as socialism was in many ways unclear but still seemed at the time to include thenationalization of the key sectors of the economy. The history of Social-Democracy as a movement since then has beenthat of a slow but continuous shift away from a radical politics to a very centrist orientation.

The parties repudiated their theoretical internationalism in 1914 by lining up to support their governments during the FirstWorld War. After the Second World War, the parties aligned themselves with the United States in the Cold War againstthe Soviet Union. And in 1959, at its Bad Godesburg conference, the German SPD officially repudiated Marxism entirely.It stated that "from a party of the working class, the Social-Democratic Party has become a party of the people."

What the German SPD and other social-democratic parties came to stand for at that time was the social compromisecalled the "welfare state." In this objective, in the period of the great expansion of the world-economy during the 1950sand 1960s, it was quite successful. And at that time, it remained a "movement" in the sense that these partiescommanded the active support and allegiance of very large numbers of persons in their country.

When, however, the world-economy entered into its long stagnation beginning in the 1970s, and the world entered theperiod dominated by neo-liberal "globalization," the social-democratic parties began to go further. They dropped theemphasis on the welfare state to become the advocates merely of a softer version of the primacy of the market. Thiswas what Blair's "new Labour" was all about. The Swedish party resisted this shift longer than others, but it too finallysuccumbed.

The consequence of this, however, was that Social-Democracy ceased to be a "movement" that could rally the strongallegiance and support of large numbers of persons. It became an electoral machine that lacked the passion of yesteryear.

If however social-democracy is no longer a movement, it is still a cultural preference. Voters still want the fading benefitsof a welfare state. They regularly protest when they lose still another of these benefits, which is happening with someregularity today.

Finally a word about the entry of the far right, anti-immigrant party into the Swedish parliament. Social-democrats havenever been very strong on the rights of ethnic or other "minorities" -- still less on the rights of immigrants. Social-democratic parties have tended to be parties of the ethnic majority in each country, defending their turf against other workers whom they saw as undercutting their wages and employment. Solidarity and internationalism were slogans thatwere useful when there was no competition in sight. Sweden didn't have to face this issue seriously until recently. Andwhen it did, a segment of social-democratic voters simply moved to the far right.

Does social-democracy have a future? As cultural preference, yes; as movement, no.



Democracy is a very popular word these days. There is virtually no country in the world today whose government does

not claim to be the government of a democracy. But at the same time, there is virtually no country in the world todayabout which others -- both inside the country and in other countries -- do not denounce the government as beingundemocratic.

There seems to be very little agreement about what we mean when we say a country is democratic. The problem is clear in the very etymology of the word. Democracy comes from two Greek roots -- demos , or people, and kratia , or rule, theauthority to decide. But what do we mean by rule? And what do we mean by the people?

Lucien Febvre told us it is always important to look at the history of a word. The word, democracy, was not always souniversally popular. The word first came into common modern political usage in the first half of the nineteenth century,primarily in western Europe. At that time, it had the tonality of terrorism today.

The idea that the "people" might actually "rule" was considered by all respectable people as a political nightmare,dreamed up by irresponsible radicals. In fact, the principal objective of respectable people was how to make sure that itwas not the majority of the people who had the authority to decide. This authority had to be left in the hands of peoplewho had interests in preserving the world as it was, or as it should be. These were people with property and wisdom,who were considered competent to make decisions.

After the revolutions of 1848, in which the "people" rose up in social and national revolutions, men of property and


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competence grew frightened. They responded first with repression, and then with calculated concessions. Theconcessions were to admit people, slowly and bit by bit, to the ballot. They thought that the ballot might satisfy thedemands of the "people" and in effect co-opt them into sustaining the existing system.

Over the next 150 years, this concession (and others) worked to a considerable degree. Radicalism was muted. Andafter 1945, the very word, democracy, was co-opted. Everyone now claimed to be in favor of democracy, which is wherewe are today.

The problem, however, is that not everyone is convinced that we are all living in truly democratic countries, in which thepeople -- all the people -- are truly the ones who are ruling, that is, making the decisions.

Once the representatives are chosen, they quite often do not fulfill the demands of the majority, or they oppressimportant minorities. The "people" often react -- by protest, by strikes, by violent uprisings. Is it "democratic" when thedemonstrations are ignored? Or is it "democratic" when the government backs down and submits to the will of the"people"?

And who are the people? Are they the numerical majority? Or do major groups have rights that should be guaranteed?Should important groups have some relative autonomy? And what kinds of compromises between the "majority" andimportant "minorities" constitute "democratic" results?

Finally, we must not neglect the ways in which the rhetoric about democracy is used as a geopolitical instrument.Denouncing other countries as undemocratic is regularly used as a justification for intrusion into politically weaker countries. The results of such intrusions are not necessarily that more democr

the official line almost everywhere is that the world

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