Take up the White Man’s burden, Send forth the best ye breed
Go bind your sons to exile, to serve your captives’ need;
To wait in heavy harness, On fluttered folk and wild—
Your new-caught, sullen peoples, Half-devil and half-child.
The correspondent, trying to stiffen the U.S. government’s spine, just as Kipling had tried to do with his poem, reminded Washington:
It should be remembered that more than 100 years ago, the British poet Rudyard Kipling wrote his famous poem—a warning about the responsibilities of empire that was directed not at London but at Washington and its newfound imperial responsibilities in the Philippines. It is not clear if President George W. Bush is a reader of poetry or of Kipling. But Kipling’s sentiments are as relevant today as they were when the poem was written in the aftermath of the Spanish-American War.38
The United States straddles the globe with its military might. Despite the closure of hundreds of bases in Iraq and Afghanistan during Obama’s presidency, the U.S. operates “nearly 800 military bases in more than 70 countries and territories abroad—from giant ‘Little Americas’ to small radar facilities. Britain, France and Russia, by contrast, have about 30 foreign bases combined.”39
New York Times columnist Thomas Freidman, a strong supporter of U.S. imperial adventures abroad, observed in the late 1990s in words that still ring true: “The hidden hand of the market will never work without a hidden fist—McDonald’s cannot flourish without McDonnell Douglas…. And the hidden fist that keeps the world safe for Silicon Valley’s technologies is called the United States Army, Air Force, Navy and Marine Corps.”40
CAPITALISM TODAY
Capitalism has the same basic features today that it has had since it began a few centuries ago. It has expanded to nearly every corner of the globe and into every aspect of our lives. The profit motive reigns supreme as the motivating force that propels the economy. Naturally, as the system matures and nation-states rise and fall, significant changes have occurred since the 1970s.
Growth Slows
Economic growth has slowed in the wealthy capitalist nations of Europe, Japan, and the United States. For example, the U.S. annual real GDP growth rate, corrected for inflation, averaged 4.3 percent in the 1950s and ’60s, 3.2 percent in the ’70s, ’80s, and ’90s, and 1.8 percent from 2000 to the middle of 2016.
Increasing productivity and the addition of more factories, stores, and equipment during flush times has resulted in huge overcapacity of industrial capacity and retail outlets and in relation to what can be profitably marketed. In December 2016, seven and a half years after the Great Recession was declared over, only 75 percent of U.S. industry capacity was being utilized.41 And though the shopping malls serving the wealthy are still doing well today, those serving the rest of the population are struggling. Between 2010 and 2015, about two dozen “dead malls” closed in the United States; another sixty or so are on the brink of failure, and many more are in serious trouble.42 Global overcapacity in many economic sectors is one factor slowing economic growth.
In 2016, a trend of slow growth, what some economists call “secular stagnation,” has taken over much of the world. In Japan, Europe, and the United States, growth is occurring at rates far below what is possible. China’s growth, relatively high in comparison to other countries, has slowed considerably. Global trade hasn’t increased in close to two years, leading to an overcapacity in the shipping industry and to the 2016 bankruptcy of one of the major ocean shipping companies, the South Korean–owned Hanjin Shipping. Investment in new productive capacity has declined, threatening future growth. International corporations are sitting on trillions of dollars. Zheng Zhe, chairman of Gulifa Group, a manufacturing company in eastern China, said, “I don’t know what to invest. It worries me a lot…. A lot of industries that we used to put money in have seen tremendous drop in returns. I dare not invest anymore.”43 This is precisely the problem that many corporations face, so they use a large portion to buy back their own stock, buy other companies, or pay out more dividends instead of investing in future production capabilities.
Neoliberal Policies and Consequences
In response to the return of slow economic growth in the 1970s, capitalists launched a multifaceted effort to enhance their economic and political power, moving toward implementing laws and practices that are collectively referred to as neoliberalism and harken back to earlier periods such as the 1920s. The essential goal of this effort has been freeing capital from as many restraints as possible, resulting in a massive transfer of wealth and power from the public to the private sector. Public services and facilities have been privatized, industry deregulated, unions attacked, tax rates for corporations and the wealthy cut, and social spending slashed, in the name of flexibility and “austerity.”
Neoliberalism does not represent a break from the underlying dynamics of capitalism. It is merely an aggressive response by capitalists, reasserting their interests in the face of social programs they don’t want to pay for, loss of power to labor unions, and the crisis of low profitability. In the United States, an opening salvo in a heightened class war was the 1971 Lewis Powell memo to members of the U.S. Chamber of Commerce that only came to light after Powell’s appointment to the Supreme Court by Nixon. Powell maintained that it was no longer enough for corporations merely to secure profits: “If our system is to survive, top management must be equally concerned with protecting and preserving the system itself.” Saving the free enterprise system required “the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.”44 The memo
inspired the establishment of the powerful Business Roundtable (which has only CEOs as members), the American Legislative Exchange Council, the Heritage Foundation, the Cato Institute, and Citizens for a Sound Economy (the forerunner of Americans for Prosperity). Within a decade the number of firms with lobbyists expanded by almost fifteen-fold. Corporate PACs quadrupled in number between 1976 and the mid-1980s.45
The massive amounts of money in politics, the notorious “revolving door” between government and business, the cozy relationship between corporations and the government agencies that regulate them, tax cuts for the rich and big business, international “free trade” agreements such as NAFTA and the WTO that favor business interests over those of workers—all point to the enormous influence of business on government.46
As part of the offensive against labor, unions were blamed for unemployment and economic crises because their workers were too well paid, too secure in their jobs, or had too many benefits. Attacks on wages, benefits, and labor rights were justified by the supposed need for increased “flexibility” in the marketplace. The result has been a decline in union membership in the United States from about one-third of all workers a half-century ago to about 10 percent today (with less than 7 percent in private businesses). The attack on labor went hand in hand with an ideological and political offensive to roll back the social gains of the 1960s and 1970s made by African Americans, women, environmentalists, and other social groups.
With the combined effects of technological changes, slow growth in traditional full-time employment, and greater power of business owners to determine the conditions of work, more people are working in what is called the “gig-economy.” It’s estimated that one-third of U.S. workers are employed in jobs that pay no benefits, offer no security, may have irregular hours, and have few legal protections. About 70 percent of these workers “report being stiffed at one time or another.”47 While some consider the U.S. to be near full employment in early 2017, an estimated 20 million people have been left behind, “looking for work, out of the labor force but unhappy about it, or report working part-time when they’d prefer more hours.”48 (The situation for workers in Europe is also difficult, with the unemployment rate about double that in the United States