Ismael Hossein-zadeh’s “Beyond Mainstream Explanations of the Financial Crisis”
The Consequences of Parasitical Capitalism
Book review by Isaac Christiansen | CounterPunch | May 23, 2014
Ismael Hossein-zadeh has done a masterful job in explaining the causes of the 2007-08 financial collapse and in identifying what must be done in response. While there is a consensus that the main source of the 2008 financial collapse was the accumulation of too much toxic debt, there is little agreement on the factors that precipitated the buildup of all that unsustainable debt. Focusing on superficial descriptions or symptomatic factors such as deregulation, securitization, greed, and the like, mainstream economics falls way short of providing a satisfactory explanation for the collapse, or the ensuing long recession. Now comes a newly published book, Beyond Mainstream Explanations of the Financial Crisis: Parasitic Finance Capital, which skillfully fills this theoretical void as it provides an alternative explanation of the 2008 financial collapse, of the ensuing long recession and of the neo-liberal austerity responses to it. Instead of simply blaming the “irrational behavior” of market players, as neo-liberals do, or lax public supervision, as Keynesians do, the study focuses on the core dynamics of capitalist development that not only created the financial bubble, but also fostered the “irrational behavior” of market players and subverted public policy.
Hossein-zadeh sets out in Beyond Mainstream Explanations of the Financial Crisis to first demonstrate the origins of the crisis and the subsequent transfer of “tens of trillions” of dollars from the vast majority of society into the coffers of the financial speculators through the imposition of austerity cuts on the many for the benefit of the few; and secondly to examine potential societal responses to avoid the repetition of such crises in the future. To do this, he begins by examining the two most prominent explanations for the crisis: the neoliberal explanation, which claimed it was due to irrational market actors and/or intrusive government policies that interfered with the self-correcting market mechanism; and the Keynesian explanation, which explained the crisis as the result of excessive deregulation, “inappropriate” public policy and supply side strategies. The author skillfully exposes the weaknesses of both and offers a compelling and well grounded alternative explanation, as indicated in the book’s title.
The book is well written and is easily understood by those who may not have an extensive background in economic theory. At the same time, it provides keen insights that are essential to understanding the crisis for those who may be more experienced in the field. It is structured with the first five chapters devoted to understanding crises within advanced capitalism, particularly the role of finance capital in provoking them, while the final three chapters are dedicated to examining solutions. Moreover, the work is an essential heuristic tool for any and all who wish to show how and why advanced capitalist economies tend towards crisis and the role of finance capital as a catalyst of crisis. A more thorough examination of the work’s primary contributions follows below.
In Chapter one Hossein-zadeh explains that neoliberal conceptualizations suffer from a misplaced religious-like faith in the market mechanism that led the leading neoliberal/neoclassical economists to remain oblivious to the impending crash. Due to neoliberals’ blind faith in the income-expenditure (or supply-demand) circular flow model, their economic theory is impervious to the fact that contradictions can arise within the real sector itself as well as to the reality that contradictions can also arise between the financial and the real sector. This led the leading neoliberal/neoclassical economists like Ben Bernanke and the IMF financial gurus to predict continual expansion up through the very eve of the crisis, and later to offer mistaken remedies such as quantitative easing and more funds to the financial sector. The impact of these measures is that instead of preventing a new bubble from forming they put us well on the way to creating another one.
In chapter two Mr. Hossein-zadeh delves into the weaknesses of Keynesian explanations of the crisis, arguing that while they are not wrong to signal deregulation as part of the problem leading to this crisis, they naively believe that capitalism will allow itself to be regulated without pressure from the people, thereby ignoring the power relationship between capitalism and the state. Not surprisingly, Keynesians tend to be oblivious as to why their more sane-sounding prescriptions for increasing public demand (through the promotion of New Deal type economic programs) and curtailing the aggressive and irresponsible behavior of financial players through more regulation have not been followed. While their policy suggestions may prove effective under certain circumstances, Keynesians fail to see or acknowledge that profit can also be increased through more intense exploitation of workers, that is, through supply-side measures. Furthermore, while the New Deal reforms were beneficial for the extrication of the U.S. economy from the grips of the Great Depression, these were followed much more as a response to working-class pressure from below then as a deliberated response to the writings of Keynes. In addition, the long economic expansion that followed was also due to the specific global economic situation of vast amounts of capital destroyed in Europe leaving the U.S. without much competition for its exports.
Much of the weakness of Keynesian economic theory, like all neoclassical economics, is their rejection of the category of value, and thus any real understanding as to the origin of social wealth and class dynamics. The general weaknesses of neoclassical economics are covered expertly in chapter 3. This chapter examines the weaknesses in the neoclassical understanding of the relationship between industrial and finance capital. The neoclassical position traditionally argues that the latter is limited by the real expansion of the former, and thus remains oblivious to the possibility of a crisis forming in the financial sector and spreading to the real ‘productive’ sector. To understand the real developments, Hossein-zadeh convincingly argues, we need to turn to Karl Marx’s Volume III and look at what he termed ‘fictitious capital’, when Marx examined how value tended to be siphoned from the sector in which it was produced to the unproductive sectors of the economy in pursuit of speculative investment.
Chapter 4 looks at the historical growth of finance capital (whose share of GDP in 2008 was more than double its share on the eve of the Great Depression in 1929), the growth of speculative activities (derivative markets, credit-default swaps) and the role of private control of the money supply. Each one of these phenomena is analyzed here in their social impacts and class/political dynamics. Here the author (p76) demonstrates that the speculative activity of finance capital accelerates “accumulation of fictitious capital through asset price inflation” (often with the help of public funds that simultaneously act as insurance protecting the speculators from the potential consequences of their socially deleterious behavior), creating a bubble that eventually bursts—with the public left paying the debt for the now-devalued assets.
This chapter also demonstrates that the bailouts for the speculators and austerity for the many, which further increased the already sharp economic inequality, were not an economic necessity but a reflection of the power of finance capital over the state and the monetary authority. To this end, Hossein-zadeh reflects on the immense tax-breaks for the wealthy, gargantuan military spending and lucrative contracts for weapons producers that created ‘public’ debt as a pretext to slash necessary social programs. The chapter demonstrates that we live under an economic system where losses are socialized and profits are privatized.
In Chapter 5, Hossein-zadeh reflects on Marx’s understanding of parasitic finance capital, its place within labor theory of value, and its contribution to a better understanding of the causes behind the present economic crisis. In Vol. III of Capital Marx outlined how the surplus value produced in the industrial and agricultural sectors ends up being divided between the merchant (or commercial capital), finance capital (money lending capital) and ground rent (Marx [1894] 1981). Hossein-zadeh points out that, according to Marx, fluctuations of finance capital could take place independent “of the movement of the actual capital it represents” (p86, quoted in Hossein-zadeh); and that as capitalism develops the movement of money (finance) capital becomes more and more independent of the movement of industrial capital. This is critical for his argument that crisis can hit the speculative financial sector at a moment when there is not a crisis within the real sector, but that through the tightening of credit and asset price deflation spread the crisis from the speculative to the productive sector.
The author further argues in this chapter that contemporary Marxists, unlike Hilferding and Lenin who expanded in the early 20th century on Marx’s work on finance capital, have largely abandoned systematic explorations into the workings of finance capital (generally viewing it as secondary to their conception of a Marxian theory of crisis), and focused primarily on the movements within the productive sector. It is not that Hossein-zadeh disagrees in principle with the contemporary Marxist scholars about the potential for crisis to arise within the circuit of productive capital; but that many of these Marxists have overlooked the fact that crisis can and does at times start within the financial sector and proceeds to spread to the real sector. Many contemporary Marxist theoreticians and economists seem to argue, in an inconsistent or self-contradicting fashion that “asset price inflation can boost demand and cause or magnify an expanding real cycle; but debt and/or asset price deflation cannot cause or aggravate a real-sector recession!” (p107).
In Chapter 6 the author explores the historical record of debt cancellations/write-downs, dating back to Bronze Age Mesopotamia (2400-1400 BCE) and running through the 5th and 4th centuries BCE. Here he examines the evidence that suggests that not only were debt cancellation and land restitution/reform common practices in this epoch, but that they often led to economic renewal. While there are moral and ethical arguments that can easily be made in favor of the biblical Jubilee and debt cancellation in general, Hossein-zadeh goes beyond these points to argue that the historical record offers clear evidence that an economic recovery would not occur so long as the vast majority of the population is saddled with overwhelming debt and interest payments. The author further argues that the decline of these socially-beneficial practices coincided with the rise of private property and the growth of power of landowning and rentier classes, and that these classes exerted influence over the state/religious authorities to deemphasize these central aspects to the Old Testament’s socio-economic reforms.
In Chapter 7 the author makes the case for public banking. Here he underscores once again the pernicious role of private banking in advancing the interests of the wealthy few in general and finance capital in particular at the expense of the many. He argues that while private banks “create financial bubbles during expansionary cycles and credit crunch during contradictory ones”, public banking “can provide steady, reliable financial resources as dictated by a nation’s industrial and/or commercial needs”(p129). Crucial here is the superior economic record held by the BRICS (Brazil, Russia, India, China and South Africa) countries in weathering the 2008 financial collapse and the ensuing economic crisis. Contrary to a situation in which the state becomes beholden to creditors, when banks are nationalized the state has additional resources with which to engage in essential public projects that both serve a social purpose and stimulate demand. While acknowledging that public banking by itself is insufficient to prevent the recurrence of all economic crises, Hossein-zadeh successfully makes the case that this is a necessary first step to avert crises that originate within the financial sector.
In the final chapter, the author soundly argues that there are no shortcuts to superseding capitalism by solely nationalizing the banking system; and that we must move beyond capitalism itself, or else we would be subjected to the throes of its logic. Here he examines the role of labor as one of the key players in confronting capital. Sadly, as he points out in this chapter, many unions have become caught up in business unionism and have tragically become vehicles for transmitting the dictates of capital to the workers (as opposed to vice-versa!), and have been unable (or unwilling) to resist the generalized assault on labor in the form of layoffs, wage cuts and outsourcing.
A central explanation for the debilitation of unions offered here lies in capital’s global reach and the globalization of production. Capital has free global movement and is organized on an international level and thus is able to play off workers in various countries against each other in a race to the bottom in terms of worker safety, salaries, benefits, labor laws and environmental protections. Labor must therefore organize internationally so as to be able to effectively resist a globalized capitalist system. A key element of this strategy lies in resisting all forms of chauvinisms, and reactionary nationalisms that have at times infected the labor movement and can lead to what Edna Bonacich (1972) referred to as a split-labor market.
Dr. Hossein-zadeh in this chapter also looks at the limitations of the Occupy movement, arguing that while their heart was in the right place, Occupy activists had condemned themselves to be ineffective as a long-term force for change by refusing to adopt an organizational structure or outline specific demands. The author thus points us back to the critical role of labor to play in this regard, but that it is essential that they organize and coordinate globally, otherwise capital will be able to outmaneuver workers’ resistance and subject labor to its logic. In the end, Hossein-zadeh remains hopeful based on the seeds of international labor organizing that labor will be able to meet this challenge in the future and serve as a primary catalyst for meaningful socio-economic transformation. In summary, I recommend this book without reservation, as a critical component of the library of those who are not just concerned with understanding the dynamics of finance capital and its role in facilitating economic crisis, but to all those who are genuinely interested in bringing about a more socially just and equitable society.
Isaac Christiansen is a Ph.D Student in the Sociology Department at Iowa State University.
Works Cited
Bonacich, Edna. 1972. “A Theory of Ethnic Antagonism: The Split-Labor Market” American Sociological Review, 37:5 547-559.
Marx Karl. [1894] 1981. Capital Vol. III Penguin Books in Association with New Left Review. London WI.
Evo’s Bolivia: Continuity and Change
By Linda C. Farthing and Benjamin H. Kohl
Out now. An accessible account of Evo Morales’s first six years in office, offering analysis of major issues as well as interviews with a wide variety of people, resulting in a valuable primer on Bolivia and Morales’s “process of change”.
In this compelling and comprehensive look at the rise of Evo Morales and Bolivia’s Movimiento al Socialismo (MAS), Linda Farthing and Benjamin Kohl offer a thoughtful evaluation of the transformations ushered in by the western hemisphere’s first contemporary indigenous president. Accessible to all readers, Evo’s Bolivia not only charts Evo’s rise to power but also offers a history of and context for the MAS revolution’s place in the rising “pink tide” of the political left. Farthing and Kohl examine the many social movements whose agendas have set the political climate in Bolivia and describe the difficult conditions the administration inherited. They evaluate the results of Evo’s policies by examining a variety of measures, including poverty; health care and education reform; natural resources and development; and women’s, indigenous, and minority rights. Weighing the positive with the negative, the authors offer a balanced assessment of the results and shortcomings of the first six.
Torture is Mainstream Now
By David Swanson | War is a Crime | April 13, 2014
As Rebecca Gordon notes in her new book, Mainstreaming Torture, polls find greater support in the United States for torture now than when Bush was president. And it’s not hard to see why that would be the case.
Fifteen years ago, it was possible to pretend the U.S. government opposed torture. Then it became widely known that the government tortured. And it was believed (with whatever accuracy) that officials had tried to keep the torturing secret. Next it became clear that nobody would be punished, that in fact top officials responsible for torture would be permitted to openly defend what they had done as good and noble.
The idea was spread around that the torture was stopping, but the cynical could imagine it must be continuing in secret, the partisan could suppose the halt was only temporary, the trusting could assume torture would be brought back as needed, and the attentive could be and have been aware that the government has gone right on torturing to this day with no end in sight.
Anyone who bases their morality on what their government does (or how Hollywood supports it) might be predicted to have moved in the direction of supporting torture.
Gordon’s book, like most others, speaks of torture as being largely in the past — even while admitting that it isn’t really. “Bush administration-era policies” are acknowledged to be ongoing, and yet somehow they retain the name “Bush administration-era policies,” and discussion of their possible prosecution in a court of law does not consider the control that the current chief perpetrator has over law enforcement and his obvious preference not to see a predecessor prosecuted for something he’s doing.
President Elect Obama made clear in January 2009 that he would not allow torturers to be prosecuted and would be “looking forward” instead of (what all law enforcement outside of science fiction requires) backward. By February 2009, reports were coming in that torture at Guantanamo was worsening rather than ceasing, and included: “beatings, the dislocation of limbs, spraying of pepper spray into closed cells, applying pepper spray to toilet paper and over-forcefeeding detainees who are on hunger strike.” In April 2009 a Guantanamo prisoner phoned a media outlet to report being tortured. As time went by the reports kept coming, as the military’s written policy would lead one to expect.
In May 2009, former vice president Dick Cheney forced into the news the fact that, even though Obama had “banned torture” by executive order (torture being a felony and a treaty violation before and after the “banning”) Obama maintained the power to use torture as needed. Cheney said that Obama’s continued claim of the power to torture vindicated his own (Cheney’s) authorization of torture. David Axelrod, White House Senior Advisor, refused repeatedly, to dispute Cheney’s assertion — also supported by Leon Panetta’s confirmation hearing for CIA director, at which he said the president had the power to torture and noted that rendition would continue. In fact, it did. The New York Times quickly reported that the U.S. was now outsourcing more torture to other countries. The Obama administration announced a new policy on renditions that kept them in place, and a new policy on lawless permanent imprisonment that kept it in place but formalized it, mainstreamed it. Before long Obama-era rendition victims were alleging torture.
As the Obama White House continued and sought to extend the occupation of Iraq, torture continued to be an Iraqi policy, as it has post-occupation. It has also remained a U.S. and Afghan policy in Afghanistan, with no end in sight. The U.S. military has continued to use the same personnel as part of its torture infrastructure. And secret CIA torture prisons have continued to pop into the news even though the CIA was falsely said to have abandoned that practice. While the Obama administration has claimed unprecedented powers to block civil suits against torturers, it has also used, in court, testimony produced by torture, something that used to be illegal (and still is if you go by written laws).
“Look at the current situation,” Obama said in 2013, “where we are force-feeding detainees who are being held on a hunger strike . . . Is this who we are?” Well, it is certainly who some of us have become, including Obama, the senior authority in charge of the soldiers doing the force-feeding, and a human chameleon able to express outrage at his own policies, a trick that is perhaps more central to the mainstreaming of vicious and sadistic practices than we always care to acknowledge.
The mainstreaming of torture in U.S. policy and entertainment has stimulated a burst of torture use around the globe, even as the U.S. State Department has never stopped claiming to oppose torture when it’s engaged in by anyone other than the U.S. government. If “Bush-era policies” is taken to refer to public relations policies, then there really is something to discuss. The U.S. government tortured before, during, and after Bush and Cheney ran the show. But it was during those years that people talked about it, and it is with regard to those years that people still talk about it.
As Rebecca Gordon’s book, Mainstreaming Torture: Ethical Approaches in the Post-9/11 United States, recounts well, torture has been around. Native Americans and enslaved African Americans were tortured. The CIA has always tortured. The School of the Americas has long trained torturers. The war on Vietnam was a war of mass-murder and mass-torture. Torture is standard practice in U.S. prisons, where the torture of Muslims began post-9-11, where some techniques originated and some prison guards came from via the National Guard who brought their torturing to an international set of victims for the Bush-Obama era. [Abuse of POWs and torture were also common practices of both sides of the American civil war, post WWII rape of civilians and abuse and murder of POWs was rampant as well]
One of Gordon’s central points, and an important one, is that torture is not an isolated incident. Rather it is an institution, a practice, a collective endeavor that requires planning and organization. Defenders of torture often defend a widespread practice of purely vicious evil by reference to a single imaginary incident in which it would make sense to torture someone. Imagine, they say, that you knew for certain (as of course you would not) that many people were about to be killed unless a particular person revealed something. Imagine you were certain (as of course you would not be) that you had found that person. Imagine that contrary to accumulated wisdom you believed the best way to elicit the information was through torture, and that you were sure (as of course you would not be) that the information would be revealed, that it would be accurate (nobody EVER lies under torture), and that it would prevent the greater tragedy (and not just delay it or move it), with no horrible side-effects or lasting results. Then, in that impossible scenario, wouldn’t you agree to torture the person?
And doesn’t that fantasy justify having thousands of people prepared to engage in torture even though they’ll inevitably torture in all sorts of other situations that actually exist, and even though many thousands of people will be driven to hate the nation responsible? And doesn’t it justify training a whole culture to support the maintenance of an apparatus of torture, even though uses of torture outside the fantasized scenario will spread like wildfire through local police and individual vigilantes and allied governments?
Of course not. And that’s why I’m glad Gordon has tackled torture as a matter of ethics, although her book seems a bit weighed down by academic jargon. I come at this as someone who got a master’s degree in philosophy, focusing on ethics, back before 9-11, back when torture was used as an example of something evil in philosophy classes. Even then, people sometimes referred to “recreational torture,” although I never imagined they meant that any other type of torture was good, only that it was slightly less evil. Even today, the polls that show rising — still minority — support for torture, show stronger — majority — support for murder, that is for a president going through a list of men, women, and children, picking which ones to have murdered, and having them murdered, usually with a missile from a drone — as long as nobody tortures them.
While many people would rather be tortured than killed, few people oppose the killing of others as strongly as they oppose torturing them. In part this may be because of the difficulty of torturing for the torturers. If foreigners or enemies are valued at little or nothing, and if killing them is easier than torturing them, then why not think of killing as “cleaner” just as the Obama administration does? That’s one ethical question I’d like to see taken up even more than that of torture alone. Another is the question of whether we don’t have a duty to put everything we have into opposing the evil of the whole — that being the Nuremberg phrase for war, an institution that brings with it murder, imprisonment, torture, rape, injury, trauma, hatred, and deceit.
If you are going to take on the ethics of torture alone, Mainstreaming Torture provides an excellent summary of how philosophy departments now talk about it. First they try to decide whether to be consequentialist or deontological or virtue-based. This is where the jargon takes over. A consequentialist ethics is one that decides on the propriety of actions based on what their likely consequences will be. A deontological ethics declares certain actions good or bad apart from their consequences. And an ethics of virtues looks at the type of life created by someone who behaves in various ways, and whether that person is made more virtuous in terms of any of a long list of possible virtues.
A competition between these types of ethics quickly becomes silly, while an appreciation of them as a collection of insights proves valuable. A consequentialist or utilitarian ethics is easily parodied and denounced, in particular because supporters of torture volunteer such arguments. Would you torture one person to save the lives of two people? Say yes, and you’re a simple-minded consequentialist with no soul. But say no and you’re demonstrably evil. The correct answer is of course that it’s a bad question. You’ll never face such a situation, and fantasizing about it is no guide to whether your government should fund an ongoing torture program the real aim and results of which are to generate war propaganda, scare people, and consolidate power.
A careful consideration of all consequences, short- and long-term, structural and subtle, is harder to parody and tends to encompass much of what is imagined to lie outside the purview of the utilitarian simpleton (or corporate columnist). The idea of an ethics that is not based on consequences appeals to people who want to base their ethics on obedience to a god or other such delusion, but the discussions of deontological ethicists are quite helpful nonetheless. In identifying exactly how and why torture is as incredibly offensive as it is, these writers clarify the problem and move people against any support for torture.
The idea of an ethics based entirely on how actions impact the character of the actor is self-indulgent and arbitrary, and yet the discussion of virtues (and their opposite) is terrifically illuminating — in particular as to the level of cowardice being promoted by the policy of employing torture and any other evil practice in hopes of being kept safe.
I think these last two types of ethics, deontological and virtue — that is, ongoing discussion in their terms — have good consequences. And I think that consequentialism and principled integrity are virtues, while engaging in consequentialism and virtue ethics lead to better deontological talk as well as fulfillment of the better imperatives declared by the deontologists. So, the question should not be finding the proper ethical theory but finding the proper ethical behavior. How do you get someone who opposes torturing Americans to oppose torturing human beings? How do you get someone who wants desperately to believe that torture has in fact saved lives to look at the facts? How do you get someone who believes that anyone who is tortured deserves it to consider the evidence, and to face the possibility that the torture is used in part to make us see certain people as evil, rather than their evilness actually preceding and justifying the torture? How do you get Republicans loyal to Bush or Democrats loyal to Obama to put human rights above their loyalty?
As Gordon recounts, torture in reality has generated desired falsehoods to support wars, created lots of enemies rather than eliminating them, encouraged and directly trained more torturers, promoted cowardice rather than courage, degraded our ability to think of others as fully human, perverted our ideas of justice, and trained us all to pretend not to know something is going on while silently supporting its continued practice. None of that can help us much in any other ethical pursuit.
Lies About Rwanda Mean More Wars If Not Corrected
By David Swanson | War is a Crime | March 28, 2014
Urge the ending of war these days and you’ll very quickly hear two words: “Hitler” and “Rwanda.” While World War II killed some 70 million people, it’s the killing of some 6 to 10 million (depending on who’s included) that carries the name Holocaust. Never mind that the United States and its allies refused to help those people before the war or to halt the war to save them or to prioritize helping them when the war ended — or even to refrain from letting the Pentagon hire some of their killers. Never mind that saving the Jews didn’t become a purpose for WWII until long after the war was over. Propose eliminating war from the world and your ears will ring with the name that Hillary Clinton calls Vladimir Putin and that John Kerry calls Bashar al Assad.
Get past Hitler, and shouts of “We must prevent another Rwanda!” will stop you in your tracks, unless your education has overcome a nearly universal myth that runs as follows. In 1994, a bunch of irrational Africans in Rwanda developed a plan to eliminate a tribal minority and carried out their plan to the extent of slaughtering over a million people from that tribe — for purely irrational motivations of tribal hatred. The U.S. government had been busy doing good deeds elsewhere and not paying enough attention until it was too late. The United Nations knew what was happening but refused to act, due to its being a large bureaucracy inhabited by weak-willed non-Americans. But, thanks to U.S. efforts, the criminals were prosecuted, refugees were allowed to return, and democracy and European enlightenment were brought belatedly to the dark valleys of Rwanda.
Something like this myth is in the minds of those who shout for attacks on Libya or Syria or the Ukraine under the banner of “Not another Rwanda!” The thinking would be hopelessly sloppy even if based on facts. The idea that SOMETHING was needed in Rwanda morphs into the idea that heavy bombing was needed in Rwanda which slides effortlessly into the idea that heavy bombing is needed in Libya. The result is the destruction of Libya. But the argument is not for those who pay attention to what was happening in and around Rwanda before or since 1994. It’s a momentary argument meant to apply only to a moment. Never mind why Gadaffi was transformed from a Western ally into a Western enemy, and never mind what the war left behind. Pay no attention to how World War I was ended and how many wise observers predicted World War II at that time. The point is that a Rwanda was going to happen in Libya (unless you look at the facts too closely) and it did not happen. Case closed. Next victim.
Edward Herman highly recommends a book by Robin Philpot called Rwanda and the New Scramble for Africa: From Tragedy to Useful Imperial Fiction, and so do I. Philpot opens with U.N. Secretary General Boutros Boutros-Ghali’s comment that “the genocide in Rwanda was one hundred percent the responsibility of the Americans!” How could that be? Americans are not to blame for how things are in backward parts of the world prior to their “interventions.” Surely Mr. double Boutros has got his chronology wrong. Too much time spent in those U.N. offices with foreign bureaucrats no doubt. And yet, the facts — not disputed claims but universally agreed upon facts that are simply deemphasized by many — say otherwise.
The United States backed an invasion of Rwanda on October 1, 1990, by a Ugandan army led by U.S.-trained killers, and supported their attack on Rwanda for three-and-a-half years. The Rwandan government, in response, did not follow the model of the U.S. internment of Japanese during World War II, or of U.S. treatment of Muslims for the past 12 years. Nor did it fabricate the idea of traitors in its midst, as the invading army in fact had 36 active cells of collaborators in Rwanda. But the Rwandan government did arrest 8,000 people and hold them for a few days to six-months. Africa Watch (later Human Rights Watch/Africa) declared this a serious violation of human rights, but had nothing to say about the invasion and war. Alison Des Forges of Africa Watch explained that good human rights groups “do not examine the issue of who makes war. We see war as an evil and we try to prevent the existence of war from being an excuse for massive human rights violations.”
The war killed many people, whether or not those killings qualified as human rights violations. People fled the invaders, creating a huge refugee crisis, ruined agriculture, wrecked economy, and shattered society. The United States and the West armed the warmakers and applied additional pressure through the World Bank, IMF, and USAID. And among the results of the war was increased hostility between Hutus and Tutsis. Eventually the government would topple. First would come the mass slaughter known as the Rwandan Genocide. And before that would come the murder of two presidents. At that point, in April 1994, Rwanda was in chaos almost on the level of post-liberation Iraq or Libya.
One way to have prevented the slaughter would have been to not support the war. Another way to have prevented the slaughter would have been to not support the assassination of the presidents of Rwanda and Burundi on April 6, 1994. The evidence points strongly to the U.S.-backed and U.S.-trained war-maker Paul Kagame — now president of Rwanda — as the guilty party. While there is no dispute that the presidents’ plane was shot down, human rights groups and international bodies have simply referred in passing to a “plane crash” and refused to investigate.
A third way to have prevented the slaughter, which began immediately upon news of the presidents’ assassinations, might have been to send in U.N. peacekeepers (not the same thing as Hellfire missiles, be it noted), but that was not what Washington wanted, and the U.S. government worked against it. What the Clinton administration was after was putting Kagame in power. Thus the resistance to calling the slaughter a “genocide” (and sending in the U.N.) until blaming that crime on the Hutu-dominated government became seen as useful. The evidence assembled by Philpot suggests that the “genocide” was not so much planned as erupted following the shooting down of the plane, was politically motivated rather than simply ethnic, and was not nearly as one-sided as generally assumed.
Moreover, the killing of civilians in Rwanda has continued ever since, although the killing has been much more heavy in neighboring Congo, where Kagame’s government took the war — with U.S. aid and weapons and troops — and bombed refugee camps killing some million people. The excuse for going into the Congo has been the hunt for Rwandan war criminals. The real motivation has been Western control and profits. War in the Congo has continued to this day, leaving some 6 million dead — the worst killing since the 70 million of WWII. And yet nobody ever says “We must prevent another Congo!”

Slavery, Cotton and Imperialism
By W.T. Whitney, Jr. | CounterPunch | March 25, 2014
“Cuba is already ours. I feel it in my finger’s ends.”
– James Buchanan, 1849
Historian Walter Johnson’s highly recommended book, “River of Dark Dreams,” centers on cotton production and slave ownership in the Mississippi River Valley prior to the U.S. Civil War. Planters, it seems, believed their fate was linked to imperatives imposed through an internationalized system of sales, manufacture, and re-supply. Johnson’s spirited, enthralling narrative casts slave ownership and cotton growing as precarious undertakings. Planters on the edge of disaster strategized and improvised in order to retain both land and slaves.
Their intransigence vis-à-vis northern compatriots derived, Johnson suggests, from immersion in a labyrinth-like alternative universe that set conditions for their economic survival. Planters were alienated enough from pretensions of their own government to seek deliverance through privatized military interventions in countries seen as hospitable to plantations and slavery.
Johnson focuses on actualities and people’s lives rather than on well-trodden slavery-era themes like abolitionism, or northern industrialization, or states rights . Social and economic history in his hands tells of ledger books; cotton “pickability;” slaves starving, stolen, rebelling, and running away; search dogs; slave babies dying, slave prices, soil fertility, droughts, sandbars, and Haiti. Steamboats feature prominently, along with their explosions, gamblers, races, high-pressure engines, and dining room etiquette. They were technological marvels of their era and absolutely crucial for marketing cotton.
During the period under study, Valley cotton production increased fortyfold, the slave population, 17 times. “The greatest economic boom in the history of the United States” was in progress. Cotton was “the largest single sector of the global economy.” Planters were part of “a network of material connections that stretched from Mississippi and Louisiana to
Manhattan and Lowell to Manchester and Liverpool.” Indeed, the “rate of exploitation of slaves in a field in Mississippi … was keyed to the exchange in Liverpool (port of entry for 85 percent of U.S. planters’ cotton) and the labor of mill hands in Manchester.”
In New York southern cotton was re-sold, re-graded, and re-loaded onto other ships for the Atlantic crossing. That city consumed 40 percent of all income generated through cotton sales. Cotton made up two thirds of all U.S. exports. Yet only 10 percent of U.S. imports ended up in cotton-producing states. Southern manufacturers lacked essential equipment manufactured abroad. Cotton producers endured shortages of imported plantations supplies.
Johnson characterizes “the conceptual reach of the global economy in the first half of the nineteenth century” as “lashes into labor into bales into dollars into pounds sterling.” Cotton moved from plantations, to factors in New Orleans, to bankers and shippers in New York, to bankers, buyers, and manufacturers in England, all on a flood of promissory notes, loans, credit, and deductions.
Planters’ wealth took the form of slaves and land. Although land served as collateral for loans, “without slaves, land itself was worthless.” In effect, planters “buy Negroes to plant cotton and raise cotton to buy Negroes.” Facing hard times, slaveholders as a class could not simply transfer their investment from one form of capital to another… Their capital would not simply rust or lie fallow. It would starve. It would steal. It would revolt.”
Influential trade representatives and publicists determined upon a “spatial fix.” They envisioned the Mississippi River as conduit to southern venues favorable to cotton production and other investment possibilities. “In order to survive, slaveholders had to expand,” the author points out: “Proslavery globalism increasingly took the form of imperialist military action.”
“[F]or many in the Mississippi Valley … the most important issue in the early 1850s was Cuba.” Pursing annexation, former Spanish soldier Narciso López in 1851 invaded the island with troops drawn from “the margins of the cotton economy.” Slaveholders had donated supplies. The expedition failed, and López’ execution in Havana attracted 20,000 spectators. Former Mississippi governor and co-conspirator John Quitman raised 1000 men in 1855 for another invasion, which never materialized.
Johnson reviews the career also of slaveholder proxy William Walker whose small army in 1855 subdued Nicaraguan defenders and set him up as the country’s president. Mississippi Valley supporters provided supplies, arms, troops, and ample publicity.
Were slave-owners capitalist? Johnson rejects the notion of slavery as an “archaic” pre-capitalist mode of exploitation. He settles on “a materialist and historical analysis [that] begins from the premise that there was no nineteenth century capitalism without slavery.” […]
Johnson documents early stirrings of U.S. imperialism. The take among many leftists is that capitalism by its very nature entails recurring crises in accumulation. They assume too that for solutions capitalists look to overseas extension of their operations, even to war making. Thus slave owner longings for exploitative possibilities in the Caribbean and in Central America fueled military adventurism. “River of Dark Dreams” serves in this regard to have documented the beginnings of a U.S. turn toward a global fix for close-to-home economic incongruities. – Full review
W.T. Whitney Jr. is a retired pediatrician and political journalist living in Maine.






