Noel Ignatiev's Blog

The New World Disorder

By Noel Ignatiev

An old comrade, Dave Ranney, has just published a book, New World Disorder: The Decline of U.S. Power. Copies are available from amazon for $10.29. Following is the Preface and Overview:

During the year 2000 I wrote a book called Global Decisions, Local Collisions: Urban Life in the New World Order. The book, published in 2003, was a reflection on the past two decades of my work as a community and labor organizer and activist academic. Among my conclusions, was that in the 1970s and 1980s we experienced what I call a “crisis of value.” In response, the entire capitalist system underwent a radical restructuring which brutally displaced workers from their jobs and homes. Yet the restructured system, named a “New World Order” by President George H. W. Bush, was not sustainable. It was built on a house of cards—actually a house of credit cards. The New World Order was running on the illusion of fictitious capital in the form of bad credit. Today that house of cards is falling. We are once again in a crisis of value. I argue in this book that the present crisis of value will result either in the replacement of the global capitalist system or a radical restructuring of the system as has happened in the wake of past crises. This is a time of great opportunity for the creation of a world in which the “full and free development of every human being is its ruling principle.”

But it is also a time of great peril. The dominant role of the U.S. in the world that has persisted since the mid 1940s, and today’s global form of capitalism are being challenged from many quarters. And that challenge is likely to succeed. What will take its place is not clear. In the U.S., all politicians seem intent on holding onto the present American dominated system. I will argue that this will ultimately fail no matter which party comes to power. Proposals from liberal think tanks that include increased government spending, job sharing, transactions taxes, and “best practices” won’t work either. Conservatives wish to return to Reagan era “trickle down” programs and massive social program cuts. This approach didn’t work for Reagan and it won’t work this time either.

The challenge from the left, despite the rise of the “Occupies,” is weak and disjointed. Meanwhile there is a rise in right wing challenges to capitalism. The logic of the far right challenge could lead to a new brand of fascism. The following essay continues the analysis begun more than a decade ago to explain the falling house of cards and examine a variety of prospects for the future.

If we understand clearly what has happened in the past and what is happening now, we can then make informed choices about the directions we need to go and thus participate in shaping our own future. It is toward that end that I wrote this book. What ends up happening is really up to all of us—the thought and actions we take and don’t take. Below is a summary of the key points I will develop in the remainder of the book.

·       The crash of 2008-2009 marks the appearance of a crisis of value (Chapter 1)

·       A crisis of value emerges when the claims on the value generated by the entire global capitalist system are greater than the system is capable of producing. (Chapter 1)

·       This suggests that what we experienced beginning in 2008 was not simply “the worst recession since the Great Depression” as many politicians love to say, and what is happening today is not a slow recovery or any sort of recovery. We are at the beginning point of a much more serious crisis. (Chapter 1)

·       Crises of value have emerged throughout the history of capitalism and are inherent in the capitalist system itself. (Chapter 1)

·       Historically, when such crises have occurred there have been nasty periods of churning and flailing as businesses, governments and people frantically seek a way out of the mess. (Chapter 2)

·       In each case, the result has been massive destruction of claims on value and a radical restructuring of the system that has temporarily resolved the crisis. (Chapter 2)

·       The last major crisis of value emerged in the late 1960s. The period of churning and flailing lasted until the early 1980s. (Chapter 2)

·       The churning and flailing from the late 1960s to the early 1980s included the destruction of industry in the U.S. and much of Europe and its relocation to lower wage regions of the world. It also included radical changes in technology and institutions that made the relocation possible. (Chapters 2 and 3)

·       A New World Order that has also been referred to as globalization, the Washington consensus, or neoliberalism, took root in the 1980s. (Chapter 3)

·       The New World Order included: movement of industrial production to low wage areas of the world, the elimination of government or union restrictions on that movement, and economic policies that favored anti-inflationary strategies even in the face of unemployment. (Chapter 3)

·       The New World Order has contributed to the acceleration of environmental degradation. (Chapter 3)

·       A key to the functioning of the New World Order is the use of household debt to make up for the loss of wages due to the movement of industry to low wage areas. (Chapter 3)

·       Similarly, government debt was used to make up for the loss of tax revenues that resulted from loss of jobs and income as the manufacturing sector in the U.S. and Europe was destroyed. (Chapter 3)

·       Debt was also used in low wage areas of the world as a way to penetrate their economies, making them available to corporations from industrialized nations. (Chapter 3)

·       Debt was transformed from simply a series of loans, to commodities that could be bought and sold in global financial markets. Turning debt into a commodity made possible the massive increases in global debt. (Chapter 3)

·       The contradictions in the New World Order system have generated a new crisis of value that we face today. (Chapter 3)

·       By running much of the New World Order on debt made possible by buying and selling that debt, the system has created what I call phantasms. These phantom markets for debt have become increasingly removed from any real products, yet they impact prices people pay for real goods and services, including food and housing. (Chapter 4)

·       Phantasms generate money for a few but are ultimately not sustainable, as the housing market crash demonstrated. Yet at the same time these markets are essential for the New World Order to continue. In this sense the creation and functioning of New World Order markets contribute to the self-destruction of the New World Order. (Chapter 4)

·       The fundamental role of governments in any system is to protect the system it governs. (Chapter 4)

·       The economic, military and foreign policies of governments today are designed to protect the New World Order. (Chapter 4)

·       Because it promotes and protects policies that are deepening the present crisis of value, governments are actually contributing to the crisis and to the ongoing self-destruction of the New World Order. (Chapter 4)

·       It is quite possible that the global churning and flailing we are experiencing will continue for some time. This includes uprisings and civil wars, bickering between conservative and liberal politicians over equally untenable policies and programs, an ongoing fiscal crisis, further environmental degradation, and in the U.S., a state of permanent war and the evolution of an increasingly intrusive “national security state.” (Chapter 5)

·       As part of global churning and flailing we are also seeing various challenges to U.S. leadership of the New World Order. The most serious of these and the most likely to be successful is the effort to destroy the status of the dollar as the global reserve currency. If successful, the loss of the dollar’s supremacy will have profound and negative impacts on the ability of the U.S. to use debt to make up for its lack of value production. (Chapter 5)

·       There is also the possibility that a radical restructuring will evolve that replaces many of the essential features of the New World Order while maintaining capitalism. One possibility that is currently underway is the seizure of lands and forests that currently support subsistence farming, and the use of that land to build dams, roads, pipelines and factories that employ former agricultural workers at very low wages. Some have called this “extractative” development or “primitive accumulation,” and it is being implemented on a significant scale in Asia, Africa and South America. (Chapter 5)

·       There is also a possibility for a 21st century fascism to emerge that could be either another form of capitalism or a system in opposition to capitalism. Currently, there are popular fascist movements and examples of fascism in embryo around the world. (Chapter 5)

·       There are also possibilities that successful anti-capitalist revolutions will offer a positive alternative to both capitalism and fascism. (Chapter 5)

·       These alternatives include: abolishing the law of value, designing a system to meet human needs, and setting goals to create a world where the ruling principle is “the full and free development of every human being.” (Chapter 5)

Breaking the “Mind Forged Manacles”

Before continuing, I want to make a crucial introductory point. Discussions of politics, economics and how to move forward are being hampered by assuming that the system we see before us is the best we can do. We assume that most features of our current system are permanent, and we assess prospects for change using that assumption. Normally, we live our lives assuming that many of its features are permanent. This gives us a starting point for everything we do. It includes some agreed upon boundaries for both thought and action.  Living within these boundaries defines a practical, pragmatic life, but the assumption that these boundaries are permanent limits our ideas of what is possible. There are times when it becomes necessary to move beyond those boundaries.

I’m asking you to put on hold all of life’s “permanencies,” including your concept of human nature. Forget about what is currently permitted and what is not. Forget about what will get this candidate or another elected. Forget about the rules of Congress. Forget about the political power of the banks and the military power of the U.S. Forget about our estimates of what is practical and what is not. Open your mind to all possibilities. Only then can you go back to see which of the “permanent” aspects of your life make sense and which do not.

Way back in 1794, British poet William Blake coined the term “mind-forged manacles” to depict the self-imposed limits on thought that hold back human progress.

I wander thro’ each charter’d street,

Near where the charter’d Thames does flow.

And mark in every face I meet

Marks of weakness, marks of woe.

In every cry of every Man,

In every Infant’s cry of fear,

In every voice, in every ban,

The mind-forg’d manacles I hear.

This image of the limitations imposed by “mind-forged manacles” is good to keep in front of us as we seek a way forward out of today’s mess.

Some Notes on Reading This Book

This book aims to promote discussion of today’s issues in a new way. In order to improve readability, I have not loaded the text with footnotes. In addition, I have avoided debating the many points of view on topics I write about. Instead, I’ve put a few key terms into italics, defined them immediately then repeated those definitions in a glossary at the end of the text. Secondly, when there are some key references for ideas I put forward or factual material I draw upon, I put the references in parentheses right in the text. At the end of the book I also provide an alphabetical list of key sources. Thirdly, I italicized and made bold those sentences I consider key so you can quickly scroll through each chapter and pick out particularly important points and concepts. The most fundamental points I make are also outlined in the bullet points above, with chapter references, so you can refer back and see what I’m getting at in each chapter. Finally, there are some study questions at the end of each chapter to facilitate discussion of the book.

The book is designed so that each chapter is a building block for the chapters that follow:

·       Chapter 1 defines crisis of value as the theoretical basis for understanding the particular crisis we face today.

·       Chapter 2 shows this theory in action by placing it in a historical context.

·       Chapter 3 focuses on how the last crisis of value gave rise to the system we currently live under—The New World Order.

·       Chapter 4 takes that system and shows the nature of today’s crisis of value—how the New World Order has become a new world disorder.

·       Chapter 5 demonstrates how a variety of possible futures could evolve out of that disorder.

 You may find some parts of the book easier to read than other parts. Some parts may be of greater interest than others. In spite of the book’s logical structure, it is also written so that its parts are self-contained. Feel free to skip over a troublesome part or some of the detailed examples, then come back later to what you missed. The book is also designed to be read by book clubs and study groups. Various people can take a lead in discussing different chapters, using the study questions for that discussion.

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