By Nick Wright
LONDON: The damage Donald Trump has done to the architecture of imperial power is not an accidental feature of an unusually repugnant personality. It has its roots in the real, material conditions of the recurrent crisis in the accumulation of capital and in the projection of capital’s power on the global stage. His behaviour, on the surface, is both childlike in its drive for attention and adolescent in its flawed appropriation of reality. We see in his play a simulacrum of the irrational in art, the random accumulation of elements that defy common sense or established theory. But there is a logic at work.
The president is an unlikely intellectual, and systematic thought is not his strongest suit, but it is possible to see in his actions something of which Ayn Rand wrote. The main literary work of this crackpot philosopher of right-wing US libertarianism, Atlas Shrugged, has sold getting on for 40 million copies and is reckoned to be the second most popular book after the Bible in the US.
In The Romantic Manifesto, she wrote: “Art is a selective re-creation of reality according to an artist’s metaphysical value judgements. Man’s profound need of art lies in the fact that his cognitive faculty is conceptual, ie, that he acquires knowledge by means of abstractions, and needs the power to bring his widest metaphysical abstractions into his immediate, perceptual awareness.”
For Trump, that power is vested in the office of President of the United States — but today it is challenged. Christine Lagarde, head of the European Central Bank, told her audience at the Jacques Delors Centre, an EU-funded think tank focused on the problems of European integration, that the disruption in the global economics of capitalism, expressed in a new uncertainty around the stability of the dollar, represents an opportunity for European capital.
She said: “Multilateral co-operation is being replaced by zero-sum thinking and bilateral power plays. Openness is giving way to protectionism. There is even uncertainty about the cornerstone of the system: the dominant role of the US dollar.”
She went on: “Today, the euro is the second global currency, accounting for around 20 per cent of foreign exchange reserves, compared with 58 per cent in the case of the US dollar. Increasing the international role of the euro can have positive implications for the euro area.”
“The ongoing changes open the way to a ‘global euro moment’,” she said and added, “this is a primal opportunity for Europe to take greater control of its destiny. But this is not a privilege that will be simply granted to us. We have to earn it.”
Significantly, she drew on the telling description by former French President Valery Giscard d’Estaing, who called dollar supremacy the US’s “exorbitant privilege.”The dollar’s position as the world’s leading reserve currency confers on the US exactly an exorbitant privilege in that US monetary policy trumps the economic sovereignty of every state that is integrated into the global economy.
US monetary policy, as expressed as interest rate changes by the US central bank, the Federal Reserve Board (or Fed), varies the dollar’s value and easily makes loans denominated in dollars more expensive to repay in local currencies. US imperial power is exercised in the bond markets as decisively as it is in its deployment of military might.
Three years ago, Russia, Brazil, India, China and South Africa discussed creating a new reserve currency. Speaking in Shanghai, Brazil’s president Lula asked: “Every night I ask myself why all countries have to base their trade on the dollar. Why can’t we do trade based on our own currencies?”
With the dominance of the dollar under attack on this front, Lagarde has in mind a piece of the action that confers on the US the ability to run a trade deficit as it has almost every year since the opening of the current phase of generalised capitalist crisis in the 1970s.
When the US runs a trade deficit, it avoids the balance of payments crises that affect almost every other capitalist state because the US Treasury can create more money and sell Treasury bills and bonds. Trump’s targeting of the economies of other countries, including its nominal allies, has created an opening for European capital, but Lagarde argues it needs to up its game.
The politics of the drive towards European integration are being played out in the push towards decision-making to be grounded in qualified majority voting. This is designed to squeeze out challenges to the federal project that emanate from European elites more invested in maintaining a greater measure of sovereignty and from those with a greater investment in maintaining US patronage.
The present squabbles with Hungary and Slovakia are less about the unsavoury challenges to modern moralities that Viktor Orban and Robert Fico present and more about the needs of their respective countries to maintain a more even relationship with countries to their east than suits the EU elite.
Keir Starmer’s manoeuvres over recent weeks can be seen as a more careful positioning of Britain as the principal interlocutor between US and European capital, since this project was disrupted by the unruly British voters who chose Brexit over the wishes of their rulers.
But a new dimension is the necessity, as Starmer-Labour sees it, to be on the inside track with the creation of a military dimension to European capital. At present, this is conceived as an insurance against the Trumpian threat to abandon the territorial defence of Western Europe, but already we can see the sinews of a new military challenge to the east.
Set aside the frivolous positioning of Nigel Farage, the SNP’s John Swinney and Kemi Badenoch, Starmer’s transitional deal with the European Union has the overwhelming support of the core sections of British monopolies, big business, the banks and capital in general. Labour’s complete identity with the interests of these people is now openly expressed in the party’s propaganda.
With the EU becoming even more subordinated to the dominance of big capital, not least German — and with the interests of smaller states, and those whose geopolitical positioning puts them out of step with the military march to the east, increasingly marginalised — power is becoming even more concentrated in the German/French axis notwithstanding some of the tensions between these two giants of European capital.
For German capital, revenge is not just the projection of military force to the borders of Russia. When the victor of Berlin, Soviet Marshal Georgy Zhukov said, after the capture of the Nazi capital, “We liberated them from fascism and they will never forgive us,” he meant not just the German ruling class.
The main dimension of the EU’s increasingly assertive stance is the strengthening of the euro to present a challenge to the post-war supremacy of the dollar. The projection of its power as an exemplar of European capital’s challenge to US capital entails the projection of military might.
Hence Lagarde’s argument that constructing “a credible geopolitical base must also rest on solid military partnerships” has an unfortunate resonance for people who remember the last time capital donned its jackboots and marched East.
This is the necessary corollary to the closer integration of capital markets, and the strengthening of a firmly European bond market that is necessary to underpin the financing of a European defence pact and Starmer wants in. Every day brings home the truth that Britain’s entanglement with NATO and the European military project increases the threats to peace. (IPA Service)
Courtesy: Morning Star
