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Exaggeration as a prosecution strategy.

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Judging from the media coverage of the Urewera 4 trial, including video and audio evidence given by the Crown to the press, the prosecutorial strategy is quite clear. It consists of three interwoven strands that together offer a narrative about politically-motivated armed criminal conspiracy. The first is to say that the activities depicted in the evidence were serious military-style (paramilitary) training. The second is to characterize the exercises as, in the words of the Crown Prosecutor, “training for…guerrilla warfare,” something that implies a target and an objective. The third is to claim that this training constituted a clear and present danger to the New Zealand public, or at least to the political elite who the defendants in the alleged conspiracy commonly oppose. Although the usual sub judice protocols are said to be in place, selective  leaking of the video and audio tapes (whose legality is in dispute) helps the Crown backdrop its case, in a form of trial by media in which there is no right to rebuttal. The release of the audio and video evidence was done for prejudicial reasons, not because the Crown had to.

The problem for the Crown is that the video and audio evidence covertly collected by the Police suggest something less than dangerous proficiency on the part of Tame Iti and his activist comrades. There is no doubt that the camps had a paramilitary flavor to them. So do hunting camps, paintball competitions, male-bonding sessions and survivalist exercises. More tellingly, the video shows rank amateurism and indifferent commitment by the people involved.  As an example, Omar Hamed, an original defendant who is not on trial, is seen in close up video coverage looking like an excited 12 year old with his first rabbit hunting.22 (which was the actual weapon he was holding) as he stares directly but obliviously at a surveillance camera a meter away (which suggests a lack of situational awareness given that the Police claim that Mr. Iti repeatedly warned his activist colleagues to beware of “eyes and ears” on their activities). His pea shooter may or may not have been loaded. Mr Iti’s concerns, as it turns out, were justified.

In the video some people march purposefully and some shuffle listlessly and mill about while others converse and apparently shoot at unspecified targets. Some give instructions. Some wear balaclavas. A car bonnet is used to prop up a shot. There is rudimentary martial arts training seen in the video, but it is farcical given the skills of the people involved (in a creepy sidebar with relevance to this aspect, it is suggested in some quarters that Mr. Hamed is more dangerous to activist Left women than he is to the status quo). Audio of cluster fire (cluster fire is the overlapping of multiple shots from several weapons in order to saturate a target area) does not identify who was doing it or what they were shooting at, and the presence of spent cartridges under a pock-marked tree tells little in light of the amount of hunting that occurs in the Ureweras.

Frankly, I would be more concerned if the videos showed the activists on a boar hunt, slitting the throats of piglets while yelling “death to imperialism!” The activities shown are far from that and much more about make believe. From what I have seen, the NZ public have little to worry about from this crowd.

As I have said before, it is not a good look for anti-war, Maori and environmental activists to be playing at commando. But it is not a crime to do so–many other people do–so the prosecution’s case is built on a grand exaggeration. It attempts to show a level of competence, organization and training focus to the paramilitary exercises that simply was not there. If anything, the video evidence is an embarrassment to those in them, whether or not they had a political motive for being at the camps. That is curious because neo-Nazi groups do the same type of “training” with a better (yet pathetic) level of competence and a definite, publicly stated political goal of preparing for racial conflict, yet somehow have avoided being the subject of a Ruatoki-style Police response and four year Crown prosecution.

The Crown exaggerates its case not only to secure convictions but also to smear and deter. Mentioning the phrase “guerrilla warfare” indirectly introduces the word terrorism into the juries’ minds. By overlapping the two concepts the prosecution smears a certain type of Left activism with the dreaded “T” word. Even those not on trial–we should remember that all charges were dropped against  13 defendants–are tainted by their association with that word even though no formal charges of terrorism have been laid against any of them. The purpose of raising the specter of guerrillas in our midst is clearly to smear the defendants, but also to deter others on the Left who might wish to add paramilitary skills to their activist inventory.

The Crown imputes coherent motive to the defendants when it speaks of guerrilla warfare. It claims that it has evidence of such. But even if a common motive was established (perhaps hatred of “Da Man”), the inference is that this motive was focused on preparing to use armed violence against specific targets in pursuit of a unified goal. That is a stretch, not only because of the varied causes that the original group of defendants espoused, but also because of the clearly different levels of enthusiasm and combat skills they exhibit, none of which come remotely close to credible guerrilla organization and tactics.

Thus, from what the press coverage has been so far, the Crown prosecution of the Urewera 4 is much ado about nothing. The process is the punishment, because after four plus years of uncertainty, expense and de facto restrictions on their movements (some of the original defendants have been refused entry to foreign countries, which means that their names are on an international security list very likely provided by the NZ authorities), those on trial today, their Urewera colleagues and others on the activist Left (since the neo-Nazi Right appears to be immune) will think twice about making like Warriors even if this trial results in acquittals (the most likely case for conviction will be firearms law violations). Regardless of the outcome of the trial, in that regard the Crown prosecutors and the Labour and National governments that have overseen them will have won. Engaging in procedural delays, legal manipulation of charges and prosecutorial exaggeration is a successful Crown strategy regardless of the formal outcome.

That is the most troubling aspect of the entire affair. By stretching the definition of what constitutes a serious threat of domestic guerrilla warfare in order to prosecute a well-known group of Left-leaning fantasists (who may or may not have had wanna-be militant ambitions), in what appears to be a specifically targeted vendetta, the Crown has played loose with the basic rules of democratic jurisprudence. In doing so fairness and justice in the legal system has been sacrificed at the alter of political opportunity, which is a far worse outcome than the individual fates of the accused.

There may be new and alarming revelations to come that would substantiate the Crown’s case against the Urewera 4. But from where I sit, using what is currently in the public domain, this appears to be a prosecution based on malice, not facts.

 

On Dynastic Regimes.

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The death of Kim Jung-il and the ascent of his youngest son Kim Jung-un to the Supreme Commander’s role in North Korea highlights the problems of succession in dynastic regimes, particularly those of a non-monarchical stripe. Monarchies have history and tradition to bank on when perpetuating their bloodlines in power. In authoritarian monarchical variants such as absolute monarchies and kingdoms the exercise of political authority is complete and direct, if not by Divine Right. In democratic variants such as constitutional monarchies royal power is circumscribed and symbolic. There are also hybrid systems where royal privilege and power coexist and overlap with mass-based electoral politics, making for what might be called “royalist” democracies (such as in Thailand or the sultanates in Malaysia). In all versions royals are integral members of the national elite.

There are also differences between authoritarian and democratic non-monarchical dynastic regimes, and they have to justify themselves in other ways.  Democratic political dynasties such as the Gandhi’s in India, Bhutto’s in Pakistan, Kennedy’s in the US or Papandreou’s in Greece reproduce the family lineage within the context of political parties inserted in competitive multi-party systems. Their power is exercised via party control and influence reinforced along ideological lines and buttressed by inter-marriage with economic elites. They can come to dominate national politics when in government and their access to national authority is preferential in any event, but they do not have direct control of the state bureaucracy, courts or security apparatus. In a way, dynastic political families in democratic regimes are akin to organized crime: their influence on power is mostly discrete, dispersed and diffused rather than immediate and direct.

Non-monarchical authoritarian dynastic regimes have more direct control of the state apparatus, including the judiciary and security agencies. They tend to reproduce themselves politically via mass mobilisational parties, and tend to divide into religious and secular variants. Religious variants fuse family bloodlines with clerical authority (say, in the ordained status of fathers, uncles and sons) in pursuit of theological constructions of the proper society. Secular variants mix nationalist and developmentalist rhetoric with charismatic leadership or cults of personality, often with military trappings. In both types the dynastic leadership leads the security apparatus, which is often expanded in size and scope of authority (particularly with regard to internal security). In both sub-types personal ambitions are blurred with political objectives, often to the detriment of the latter.

There can be hybrids of the non-monarchical type that are religious or secular-dominant, where a controlling dynastic family accommodates the interests of smaller dynasties (this happens in clan-based societies).

The issue of succession is problematic for all authoritarian regimes but particularly those of non-monarchical dynastic bent. The more institutionalized the authoritarian regime, the less dynastic it tends to be. Institutionalisation of the regime provides mechanisms for political reproduction beyond bloodlines. This most often happens through the offices of a political party and a strong central state bureaucracy. The more personal dynasties fuse family fortunes with institutionalized political reproduction, the better chances they have of holding on to power. Even then, relatively institutionalized non-monarchical authoritarian dynastic rule such as the Assad regime in Syria, Qaddafi regime in Libya, Hussein regime in Iraq, Somoza regime in Nicaragua, Duvalier regime in Haiti or Trujillo regime in the Dominican Republic have proven susceptible to overthrow when their rule proves too pernicious for both national and international constituencies.

Monarchies can also be overthrown (such as that of Shah Mohammad Reza Pahlavi in Iran), although that type of regime change was more prevalent in the 19th century than it is in the 21st. Some monarchs have seen the writing on the wall and willingly accepted a constitutional status stripped of political power, such as in Spain (after the aborted coup of 1981 known as the “Tejerazo”) and more recently in Bhutan (where the last Dragon King voluntarily relinquished absolute status as part of the 2008 Constitutional reform). Other monarchies are under pressure to liberalize, such as in Tonga or (much less so) Brunei.

Add to these scenarios the problems inherent in the universal law of genetic decline and the prospects for long-term dynastic succession have markedly decreased in modern times. Many non-monarchical authoritarian dynasties span two generations but few go further than that. The transition to the grandchildren is the big demarcation point between non-monarchical authoritarian dynastic wannabes and the real thing.

The key to non-monarchical authoritarian dynastic succession is for the family bloc to embed itself within a technocratic yet compliant non-family political, military and economic circle of influence peddlers, who together form a symbiotic relationship based on patronage networks in order to govern for mutual benefit. The more that they can justify their rule on ideological grounds or in the efficient provision of pubic goods, the more they will succeed in securing mass consent to their rule. Although the bloodline becomes increasingly dependent on the entourage, the overall effect is a stable status quo. The Singaporean PAP regime exhibits such traits, although the passage of the Lee dynasty from its founding father to its third generation is increasingly problematic. The Kim regime in North Korea is in reality a military-bureacratic regime with a dynastic core that has now moved into its third generation leadership (the next six months should tell whether Jung-un will consolidate his position). Its vulnerability is its inability to deliver basic necessities to a large portion of its people, which requires ideologically-justified repression and isolation in order to maintain mass acquiescence to its rule.

Dynastic authoritarian regimes also suffer the same divisions between hard-liners and soft-liners that are common to non-dynastic authoritarians such as the military-bureaucratic regimes of Latin America in the 1960s and 1970s or the South Korean and Taiwanese regimes of the 1970s through the 1990s. These divisions on issues of policy and governance are exacerbated when played out within family circles. For example, intrigues of succession and future policy direction within the House of Saud are legendary, but the same can be said to be true about the current North Korean transition or palace politics in Morocco or Kuwait.

The bottom line is that non-monarchical dynastic successions are hard to maintain over time, and increasingly rare. The need for regime continuity is no longer as tied to family fortunes as it once was (even during the Cold War), and the pressures on family-run polities are more myriad and complex than before.  With the ongoing fall of dynastic regimes in the Middle East amid the general decline of bloodline influence on political power in most of the integrated world (“integrated world” defined as politically independent and economically inter-dependent countries), what we may be seeing in North Korea is the last of a political sub-species: the non-monarchical dynastic authoritarian regime. No matter what happens to Kim Jung-un, at least we can be thankful for that.

 

Supporting independent investigative journalism.

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There is a fund raiser for Jon Stephenson, the journalist, on Tuesday December 13 in Auckland. Jon is preparing to head back to Afghanistan to continue his work on the conflict and New Zealand’s role in it. He also has some other irons in the fire. In order to do this work he needs funding because the mainstream media outlets are too cheap or too scared of what he may bring back by way of reports. After all, look at how the government responded to his previous stories about NZDF involvement in the Afghan occupation–defamatory personal attacks coupled with a blacklisting from official sources of information even though, as it turns out, pretty much everything he has written has turned out to be true. The hard truth is that governments do not like being exposed and corporate media players do not like being off-side of governments, certainly not when the government is popular and recently re-elected. That means that the NZ MSM shy away from funding Jon’s projects (I could write an entire post on how the SST has handled Jon’s reports in the face of government threats and pressure, but the point about MSM timidity has been made).

Given the sad truth about NZ journalism and the logics that underpin it, a group of interested parties has decided to step in and organize a pub fund raiser for Jon that will allow him to return to Afghanistan. It will include entertainment and a silent auction (I am not involved in the organization of the event so am not completely up on the details). Because journalists of integrity and persistence such as Jon do not come along that often, I am going to break from my Waitakere cover and head into town to attend the event. Should Auckland-based readers be interested in attending, the details are as follows:

Gone by Christmas
6.30pm, Tuesday December 13
The Horse and Trap, 3 Enfield Street, Mt. Eden, Auckland
Tickets: $20 on the door or from Eventfinder.

Against Centrism.

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The iron law of oligarchy states that the first duty of the organization is to preserve itself. This means that agents will go against the interests of principals for tactical and strategic reasons. For class-based parties the two main sources of rank and file betrayal are vanguardism and centrism. Vanguardism refers to the centralization of decision-making authority within a party elite, which sees organizational democracy in instrumental terms rather than as a social good.  The elite agenda is, foremost, about self-preservation justified in ideological terms.

Centrism refers to the tendency of class-based parties to move to the ideological centre in pursuit of wider mass appeal. This often means turning on what were once considered foundational principles of such parties, particularly adherence to a class line. The 20th century saw the emergence of a number of these type of party, New Zealand Labour being one of them. Once that “centrist” ideological space was captured electorally by the likes of NZ Labour (the permutations of the centrist shift by Socialist and Social Democratic parties are many), other parties emerged to fill the void and stand on principle. Few of them have survived, and those that do have married indigenous and environmental planks to an amorphous anti-capitalist platform.

One such party is the Green Party of New Zealand. It emerged as a party dedicated in principle to advancing the causes described above. It championed the environment as well as indigenous rights within it, and worked hard to provide an anti-imperialist, pacifist, human rights focused and anti-corporate counter-narrative to the market-oriented discourse of Labour and the collective Right. The composition of the Green Party caucus through its first decade in parliament showed a clear class consciousness. For many Left voters the Greens provided a tactical option under MMP, since a five percent party vote coupled with electorate votes for Labour candidates helped keep Labour ideologically “honest” when in government. Or so the Greens thought.

In practice the Green experience with the 5th Labour government was less than ideal, and in fact was marked by an increasing distance between the two erstwhile Left partners. Yet, as it replenished its ranks of MPs the Green Party began to emulate Labour and other Left-based “centrist” parties: it moved away from a strong class-based orientation and towards a more moderate stance on all original three ideological pillars. It saw an increased party vote in 2008, although it is unclear if the added support came from disgruntled Labour voters or genuine voter preference for a “reasonable” Left alternative to Labour’s increasingly corporate orientation. Whatever the cause, by 2011 the Greens have stripped out the Red in their ideological watermelon. There are no longer a working class-oriented party, and in fact have shifted to one that seeks the support of middle class voters who are not so much opposed to the status quo as they are seeking NIMBY relief within it.

The Greens are predicted to get 10 percent of the party vote in the 2011 election, with some estimates rising to 12-15 percent. The surge in support clearly has roots in voter disgust with National and Labour, but also is believed to be coming from moderate Left voters who feel more comfortable with Green occupying the ideological “space” formerly held by Labour. By moderating its policies and compromising on its foundational principles, the Greens have gone mainstream. The billboard vandalism scandal may be a perverse indication of that (with grassroots activists going outside the caucus mandate to make their point).

For voters who saw the Green party as the honest Left alternative, this is unfortunate. The Green march to the centre leaves those who believe in the essence of class conflict in capitalism (and its cousin, class compromise) devoid of electoral alternatives. Specifically, there is no longer a competitive Left option that challenges the fundamental logics of the contemporary New Zealand socio-economic system. Instead, there are only accommodationists of various centrist stripes, the Greens now being one of them. They may challenge along the margins of the dominant project, but they do not question the fundamentals. Despite the presence of Leftists and anti-imperialist/corporate rhetoric in the Mana Party, it appears to be more personality-driven and ideologically incoherent than a proper class-based party. That means that there is no genuine, politically viable alternative to the Left-centrist logic.

This type of political centripidalism is a natural aspect of  first past the post party systems, especially presidential ones. But MMP is supposed to give voice to parties of principle as well as catch-all parties, and is in fact considered to be a hedge against centralism. For both methodological individualists such as those on the libertarian Right as well as the collective good advocates on on the class-based Left, the move to centralism under MMP could well be a death knell (which ACT may prove in this election, and which the demise of the Alliance previewed in the last one).

In effect, what is good for the Green Party leadership and organization is not good for those at the grassroots who want a legitimate Left parliamentary alternative that is electorally viable and committed to questioning the status quo. In order for the Greens to have remained as such they would have had to eschew the temptation of centrism and accept their role as a minor party on the ideological margins that speaks truth to power rather than be a contender for power as given. That would have meant keeping to a more “militant,” or “activist” line that did not deviate from the foundational principles of the Party.  The iron law of oligarchy suggests that never was going to be the case (and perhaps membership preferences have changed so that it would not be so), and given that Labour sold out the rank and file a long time ago (its corporatist relationship with the CTU, EPMU and other trade unions notwithstanding, since these also subscribe to the iron law), that means that in this election there is no real choice for those on the Left who want to vote for a party that can substantively influence policy rather than provide a minor corrective or circus side show to the dominant political discourse.

That being said, I am sorely tempted to vote Mana in order to try and keep the Greens honest from the Leftish fringe!

PS: Left for another time is discussion of the fact that in the absence of institutional (party) avenues of voice and redress, ideological militants of all stripes gravitate to extra- or illegal means of doing so. In the measure that formerly principled parties go centrist or are not replaced by successful others, the ideological void they leave behind is often filled by those of less institutionalist persuasion.

Turning Negatives into Positives.

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One of the more vexing problems in politics is to turn opposition to something into a virtue. Being anti-something is reactive and defensive rather than a path with which to move forward. It is the antithesis of a proactive, innovative posture where the power of a better future is conveyed in order to secure implicit agreement to the unspoken “Yes” latent in the electorate. The latter is a positive reaffirmation, often couched in crude nationalism or other symbols of consensus and collective identity. In contrast, the implicit or explicit “No” embedded in negative campaigns carries with it connotations of obstructionism, obstinacy and lack of vision.

The negative connotations of a “No” campaign suffer from a structural disadvantage when it comes to mass political psychology. All things being equal, it is harder to successfully engage in “No” campaigns rather than “Yes” campaigns, especially when the former is confronted by the latter in electoral competition. Negative campaigns can also be a sign of defeat. Although all political challengers must attack incumbents on their record, there are ways to do so in addition to simple rejection of the opponent’s policies. In practice, opposition parties that fail to cloak their campaigns in a positive and proactive message are often conceding the outcome and using the electoral process for party rejuvenation rather than truly competitive purposes.

Yet it is possible for negative campaigns to convey a positive message. An example of a successful negative campaign is the opposition to the 1989 referendum on the nature of the Chilean regime. After 16 years of market-oriented military-bureaucratic authoritarianism, General Pinochet sought to continue as a civilian president in a “guarded” democracy installed by “controlled” elections. He and his supporters formed a political party to that effect, relaxed restrictions on the political opposition, and held a referendum that proposed that voters say”Yes” to constitutional revisions that would guide the installation of the “guarded” democratic regime. Pinochet and his followers banked on their control of the media and relative economic successes to ensure that the “Yes” outcome would prevail. The language of the referendum spoke to this fact by asking voters to vote “Yes” or “No” on continuing the unfinished process of national reconstruction under a Pinochet presidency.

Opposition to the “guarded” democracy plan came from a diverse array of groups, who preferred a full transition to democracy and the removal of Pinochet from politics. It did not necessarily have the support of the majority when the referendum campaign began, and besides the advantages accrued to the Pinochet regime, it was hampered by tight campaign regulations, lack of access to publicity, restrictions on public gatherings and the fact that many of its leaders were in exile.

Even so, the Opposition campaigners phrased their negative message so that a “No” vote was a vote for democracy as well as a vote against authoritarianism. It played on the knowledge that most Chileans understood that whatever its successes, the Pinochet regime was an aberration rather than a model, and that the price for its success was not worth the benefits supposedly gained. This organic understanding of Chilean “good sense” in the face of elite-purveyed common sense shifted popular perceptions of the referendum, and the “No” vote won a commanding majority. Confronted by defeat, Pinochet was abandoned by his supporters and the stage set for a fuller transition to democratic rule (I say “fuller” because the terms of the foundational election and the character of the political system for the first post-authoritarian decade were fixed by post-referendum constitutional reforms made by the outgoing Pinochet regime under executive fiat, which were heavily weighed in favour of the elites who benefitted from the Pinochet regime and which was backed by a military commitment to defend them. It was not until the 2000s (and Pinochet’s death in 1999) that Chilean democracy was fully consolidated, and even then the structural and institutional changes wrought by the authoritarians and their successors skewed socio-economic and political power in favour of those who prospered under Pinochet).

Regardless of what happened later, the “No” campaign on the 1989 referendum succeeded in shifting the terms of the Chilean transition to democracy away from those preferred by the authoritarians and towards those of a long-repressed opposition. It is therefore a good example of turning a negative stance  into a political positive.

The success of the 1989 Chilean “No” campaign might provide some insights for Labour as it enters the final phase of the 2011 election. Labour has staked its campaign on opposition to National’s economic policies, epitomized by the “No” on Assets Sales plank.  A little more subtly, the proposal to raise the retirement age is an admission that not all is well in Aotearoa. In other words, it is an admission of a negative, which is also the case for the repeated references to job losses via immigration to Australia. Most importantly, although Labour has “positive” planks in its electoral platform, these appear to be overshadowed (at least to me) by the negative aspects of its campaign. For its part, National can play the role of positive campaigner, using the upbeat character of the Prime Minister, the hopeful nature of its policy message (however devoid of positive content that it may be) and incidentals such as the All Blacks WRC victory to cement its pro-active and affirmative image in the eyes of voters.

Given the late stage of the campaign, it might be worth considering how Labour might cast its “negative” planks in a positive light. The key is to use the implicit “No” as an affirmation of Kiwi (as opposed to class or ethnic) identity, be it in its quest for economic and political independence or in its reification of  individualism as a national trait. Here differences can be drawn with National on issues such as security policy, where National has basically subordinated its military perspective to those of Australia and the US, or on foreign investment in an increasingly deregulated domestic economic context, where National would prefer to ease restrictions on foreign capital flows into the country regardless of their impact on strategic assets, local capital or the integrity of resident labour markets and environmental conditions. Saying “no” to such things is not being obstructionist or reactionary, it is about reaffirming who we are.

I have no expertise in political marketing, but it seems to me that if the 1989 Chilean opposition could turn a negative campaign into a positive statement given the severe restrictions and disadvantages under which it operated, then Labour might consider how to cast its campaign in a way such that its opposition to National’s policy proposals becomes a reaffirmation of Kiwi autonomy and independence. Other than that, it has little else to go on.*

* I am well aware that on economic fundamentals Labour and National are two sides of the same slice of bread, and that many National policies are mere continuations of those originally set by the 5th Labour government. My point here is to show that there is a way, however improbable, for Labour to rescue its election campaign.

Is a Blue-Green Foreign Policy Possible?

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Discussion of potential coalitions stemming from the upcoming general election has largely avoided the question of foreign policy. Although the differences between Labour and National are more around the edges than at the core of New Zealand’s approach to international relations, there are some areas of significant difference, to which can be added the perspectives of the minor parties that might serve as coalition partners in a future government.

New Zealand First, Mana and the Maori Party have very little by way of foreign policy platforms, with the former adopting a mix of economic nationalism, anti-immigrant and neo-isolationist perspectives on New Zealand’s position in the world. Mana and the Maori Party’s focus on the defense of indigenous rights, with Mana  adopting a broad anti-imperialist agenda while the Maori Party seeks preferential benefits from foreign trade and investment. As a junior partner in the current National government, the Maori Party secured New Zealand ratification of the 2010 United Nations Defense of Indigenous Rights Convention (which had been opposed by the 5th Labour government), but has been silent on pretty much every other foreign policy issue.   For their part, personality-driven minor parties like United Future have no discernible foreign policy agenda.

Since the mid 1990s there has been a broad consensus on the part of the foreign policy elite with regard to New Zealand’s international relations. Labour and National agree on the trade-oriented and market nature of the New Zealand economy, as well as its general direction. They also agree on its non-nuclear position and support for multilateral resolution of international disputes. On security matters National has, as of the Wellington Declaration of November 2010, made New Zealand a first-tier security partner of the US, in both its military as well as intelligence-sharing dimensions.  Labour started the process of rapprochement with the US on security matters after  9/11, taking advantage of the fact that the US was desperate to enlist international support for its “War on Terror.” Sometimes beggars can be choosy, and the 5th Labour government took advantage of the window of opportunity presented by 9/11 to cultivate a security relationship with the US that had been dormant, apart from core intelligence sharing, since the 1980s. National has followed up by codifying the restored US-NZ security relationship in the Wellington Declaration. This includes closer Australian-New Zealand security cooperation under a US-centric  strategic perspective.

The trouble for Labour and National is that both also want to expand into non-traditional, non-Western markets, particularly in China, Southeast Asia and the Middle East. The minor contradiction is that all of these regions have current and potential trading partners that are authoritarian and habitual human rights violators, thereby giving lie to the stated New Zealand foreign policy goal of being a staunch defender of universal human rights. The bigger contradiction is that the major party approach to international security matters places Aotearoa on the horns of a diplomatic dilemma: its economic fortunes are increasingly tied to regions in which the US strategic perspective sees more rivals than partners. Again, China-US relations are instructive in that regard. By explicitly uncoupling security from trade with the Wellington Declaration, National seeks to split the diplomatic difference between larger strategic rivals, although this may result in a Melian dilemma rather than a bridge between new and traditional overseas partners.

Labour still exercises some discretion around the margins of the pro-US strategic alignment, such as stating that it will withdraw the SAS from Afghanistan rather than renew its deployment in March 2012 even if requested to do so by the US.  It also prefers a more flexible and UN-focused approach to international issues, whereas National is obsequious in its cultivation of US patronage. But on most core matters of foreign policy, National and Labour are reading off the same page.

This is where the potential coalition mix gets interesting. The most interesting possibility is that of a Blue-Green coalition between National and the Green Party. The Greens are poised to receive their largest vote ever. Although they would seem to be more natural allies of Labour when it comes to coalition politics, the Greens were burned by the Clark government on several policy matters such as the Zaoui Case, the Free Trade Agreement with China (and the content of trade agreements in general), deployment of NZDF troops abroad, security and intelligence legislation, human rights and environmental defense, animal rights and a host of other foreign policy issues. However, things may change now that Keith Locke is no longer the foreign policy and defense spokesperson for the Greens, and as I have said before, there is room for neo-realism in the Green foreign policy agenda.

Even so, National’s signing of the Wellington Declaration and extension of state powers of surveillance, detection, detention and control under the banner of countering terrorism is anathema to core Green principles.  To be part of a government that openly overlaps its security with those of the US (to include the possibility of entering wars of choice instigated by the US rather than limiting engagement in war to essential national defense or international peace-keeping), and which curtails basic civil rights in a liberal democratic setting where no serious security threat exists, cannot sit well with the Green rank and file. Selling out these principles to be part of a National-led government may well be a step too far even for the more pragmatic, second-generation leadership that controls the party (which has seen most of the original “red” cadre of which Keith Locke was part leave politics).

But it may not be. If the Greens can extract concessions around the margins of the the foreign policy agenda, say by pushing National to take a firmer stance on whaling or foreign fishery vessel operations or reaffirming New Zealand’s commitment to multilateralism, non-proliferation and peacekeeping, then perhaps its membership and the public at large will be mollified so that the coalition can be sustained. The Greens offer the perfect place to recruit a Minister for Disarmament and Arms Control. The Greens might be able to temper some of National’s trade discussions with environmental and labour-related concerns. Pigs can fly.

A Blue-Green coalition will require the Greens to compromise their foreign policy principles as the price for access to decision-making authority. A confidence and supply agreement might finesse the conundrum, but it could remain as a point of division that could well weaken the government down the road. In fact, Green access to, much less influence in, the foreign policy apparatus (to include MFAT, MOD and the various intelligence agencies involved), could well be a step too far for National and the bureaucracies involved, so the Blue-Green coalition possibility is limited on both sides.

For these reasons a Blue-Green coalition seems unlikely unless the Greens undergo a pro-market, realpolitik transformation or divorce their domestic policy agenda from their foreign policy concerns in order to focus exclusively on the former. As for the rest of the small parties, they will have little or no influence on foreign policy regardless of their electoral fortunes.

 

Gaddafi is Gone.

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The brutal end of Muammar Gaddafi’s life marks a political new beginning for Libya. The circumstances of his demise speak volumes about the road ahead.

Gaddafi was summarily executed after being captured by rebel fighters (the term “rebel” rather than revolutionary is correct in that it properly places the armed opposition in a civil rather than revolutionary war whose outcome was largely determined by external interference).  His non-military convoy was attempting to flee the rebel’s final advance on Surt, his hometown, when it was struck by a NATO airstrike (in violation of the rules of engagement NATO publicly announced when it declared a no-fly zone that included attacks on land-based military targets that posed an imminent threat to civilians). Concussed and wounded by shrapnel, Gaddafi and a few loyalists took shelter in a culvert. They were discovered and some were killed then, while Gaddafi was dragged out and manhandled by a growing mob. Disarmed, confused, pleading for mercy and bleeding, at some point soon thereafter he was head shot at point blank range (images of his wounds show powder bruns at the entry point). He was not caught in cross-fire, as there was none.

Killing a captive after surrender or capture is a war crime, including in civil wars. The rage and thirst for revenge of Gaddafi’s killers is understandable, but it shows a lack of discipline and foresight. Gaddafi and his inner circle could have provided valuable intelligence on a broad range of subjects, be it the terms of the exchange that led to the release of the Lockerbie bomber, the grey arms networks in which Libya operated, or the extent of Gaddafi’s funding of influential Western agencies such as the London School of Economics or Harvard’s private political and strategic consulting firm. Similarly, although the outcome would have been pre-determined, his trial would have provided the Libyan people with a facimilie of representative justice in which his crimes could be publicly aired, and which could serve as a foundation for a new justice system once the new regime was installed. Even Saddam Hussein was allowed that much.

The barbarism of putting Gaddafi’s decomposing corpse on display in Misurata for public viewing speaks to the levels of distrust and base nature of the sectarian divisions within Libya. These will not go away simply because Gaddafi and his clan have been removed from power. The tactical alliance against his regime will not hold now that it is gone, and given that all of the main factions are armed, this raises serious questions about the political future of the country. The cross-cutting divisions are multiple and overlapped: Eastern versus Western, Islamicist versus non-Islamicist, Berber versus Arab, Benghazian versus Tripolian, urban versus rural, coastal versus land-locked, elite versus commoner, old royalist versus new upper class. Although the role of foreign military advisors and logistical support was crucial to victory, many rebel military commanders have carved out power centres of their own, and not all of the rebel political and military leadership are democratic in inclination.

The National Transitional Council (NTC) headquartered in Tripoli has announced the formation of an interim government within a month and presidential elections in 18 months. Both goals are very ambitious and the latter is inherently flawed. Imposing a presidential system in a multi-tribal society with no history of democracy and a long history of conflict  is a recipie for authoritarianism, as political contenders will vie for and hold presidential power in pursuit of sectarian rather than national objectives. A parliamentary system with multiparty proportional representation would be a better fit given the realities on the ground, as it would force power contenders to negotiate and compromise in pursuit of coalition objectives, which in turn would put constraints on executive authority.

To put the issue in comparison, the Libyan polity is more fragmented than that of Iraq and does not have an occupying force that imposes transitional order and around which national opposition can coalesce. Iraq has a parliamentary system that recognises sectarian control of parts of the country as well as grant participation to key clans, and yet has yet to be free of violence or have fully cemented the institutional base of the post-Baathist regime. This portends darkly for the immediate prospects of a post-Gaddafi Libya.

The issue of disarmament and creation of a national military, to say nothing of disposition of Gaddafi’s purported chemical weapons stores and other sophisticated armaments, is bound up in the negotiations over the interim government and rules of the game for the political transition. Given that NATO allies are not the only foreign actors involved in Libya, and given that some of these actors are non-state or state-sponsired in nature and have conflicting agendas with NATO, this means that the post-Gaddafi situation may descend back into conflict sooner rather than later. To this can be added the purge and reconstitution of the Libyan state as a functioning sovereign entity, a process that will also be driven by mindsets as much focused on the division of spoils as it is by notions of the common good. That overlaps with the issue of oil resource control and distribution, as well as the status of contracts signed during the Gaddafi regime, both of which involve tribal politics as well as the interests on non-NATO foreign actors such as China.

All of which is to say that the circumstances of Gaddafi’s death tells us much about what the future holds in store for Libya, at least over the near term: chaos, violence and imposition rather than consensus, forgiveness, reconciliation and compromise.

 

Mooting Mutu

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Since my name was taken in vain in comparison with Margaret Mutu and her recent remarks on immigration, I would like to set the record straight as to why the comparison is false.

Margaret Mutu is a racial polemicist who received her professorship as a PC sinecure from an Auckland University administration concerned about placating key constituent groups. She is a second rate rate academic with a third rate publication record espousing fourth rate post-dependency and post-modern subaltern-focused theories. She publishes in obscure journals, mostly without peer review, and in crony academic volumes. Her books are published by local presses and receive no international mention.

She has nothing to say about the bitter employment relation disputes between the Auckland University management and its academic staff, perhaps because she is rumored to have been bought off by the management as part of that silence. She likes to talk S***t about race relations, and believes that it is impossible for non-whites to be racist. She is not the only one to think this–there are people in my old department who share that belief.

I was an internationally well respected scholar and teacher who was dismissed for sending a rude email (which was unprofessional, to be sure) to an utterly unqualified and hopeless foreign student who as it turns out invented an excuse to avoid an assignment (as happens often at Auckland). During the time I was at Auckland I published two books and over forty peer reviewed articles, chapters and reviews in major international disciplinary journals. During that time and in spite of the fact that I gave away eight years of seniority to take the Auckland job, I never made it past the Senior Lecturer rank. Now I have been blacklisted and am out of academia.

Because I said that the student’s excuse was preying on Western liberal guilt and thus were culturally driven, I was branded a racist. After litigation I was barred from returning to my career in exchange for a small monetary settlement (due to the fact that I could not afford the costs of a court case when the University had spent nearly 1 million NZ dollars keeping me out). Mutu was on the side of those who claimed I was racist even though we have never met and she was aware of my non-compromising and egalitarian atttiude towards students. Her commitment to excellence in education is, to say the least, questionable.

I was fired for jeapordising the university’s foreign student revenue stream. Mutu did no so such thing, as she only annoys white people who will send their students to the 82nd ranked university anyway. After all, where are they going to go? To a NZ university ranked 180th or so? (For the record, I taught three years at a university ranked 27th-32nd in annual rankings after my Auckland dismissal, so the place got worse after I left).

Needless to say, I have no time for Ms. Mutu and her rants. It offends me that she lumps me–an American raised in South America and who has been involved in struggles that she can only pontificate about–with Afrikkaners with attitudes.

But it offends me more that just because she says offensive things, people demand that she be fired. For better or (in this case worse), universities are supposed to be bastions of the offensive, the profane, the unfashionable and even the idiotic, simply because the role of the academe is to foster the clash of ideas and a culture of healthy, if not intense intellectual debate about subjects both esoteric and contemporary. Just because someone’s views are provocative does not mean that they should not be heard, and that is where academia plays a role.

So even if I believe that VC Stuart McCutcheon in an unethical and corrupt bully with a lot of skeletons in his closet that need to be exposed and who has an abiding hatred of intellectuals and union members (since he is neither), I applaud his defense of Ms. Mutu’s remarks. She may be offensive, and indeed quite stupid, but that is her right as an academic. It was at the point of her hire that the mistake was made, but once her position was enshrined, however bogus the rationale, she has a right to use that pulpit for public commentary without fear of employment retribution. She may not be exactly the conscience of society, but her role as a polemicist enlives its discourse. Hence, I believe that she should be retained, however overpaid she may be.

As for me–it is past time to “get a real job.”

 

Skirting the storm.

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I arrived in Miami just as Hurricane Irene turned northeast, sparing Florida but pounding the Mid- and North Atlantic seaboard. From what I saw of the outer fringe of the storm when it was a category 3 hurricane–5 meter frothing waves, high gusting winds and torrential (sometimes horizontal) rain, the folk up north were lucky that the storm weakened as it hit colder water and made landfall. Not surprisingly, many complained about the mandatory evacuation measures that were put into place, arguing that it was over-kill given the downgrading of Irene to a category 1 storm, even though the flooding and winds that did reach the major population centers clustered along the East Coast caused more than 30 deaths, major damage to property and infrastructure, and prolonged  power outages that affected over 5 million people. Just like those who flocked to the shoreline to see the big surf, it is as if they simply cannot understand the implications of what was originally headed their way. In many ways, this reflects the general state of US politics at the moment.

The current political climate in the US is dominated by the Republican primary campaign. Truth be told, it has all the aspects of a circus side-show, freaks and all. There is Michele Bachmann, she of the “always on high beam” glazed stare and Cold War apocalyptic views with the closet queen husband who claims that he converts homosexuals to heterosexuality through prayer (giving a whole new meaning to the phrase “laying on of hands”). There is Rick Perry, a W. Bush wanna-be Texas governor who does not believe in man-made climate change and endorses creationist interpretations of evolution. There is a black guy with a slave name (Herman Cain) who ran a chain of pizza shops and seems to think this is enough experience to run the country. There is the evergreen Ron Paul, who looks better over time in the measure that his party candidates increasingly evidence pre-reconstruction beliefs. There is Newt Gingrich, serial adulterer and engineer of the last government shutdown, pontificating about a return to “constitutional values” ( he must be thinking about the founding father’s penchant for liasions with female slaves). There is millionaire Mitt Romney, once again attempting to recast himself in a right-wing image, this time as a Tea Party supporter. Romney and another candidate, John Huntsmann, are both Mormon former governors of states that in no way reflect the larger society in which they exist (Massachusetts is an unsually liberal state, while Utah is unusually conservative). Behind this motley suit-clad crew are the ranters and ravers, led by Sarah Palin and Glenn Beck, who want to bomb Iran, Venezuela, North Korea, Pakistan and any other place the communist-socialist, islamofascist, feminazi, ecoterrorist gay-lesbian secular humanist alliance is taking hold.

The GOP is a party now governed by its rump, in the guise of the Christian fundamentalists and Tea Party anti-government activists (who in spite of their claimed belief in self-reliance are strangely silent on the issue of accepting federal aid to the hurricane disaster zones, perhaps because Bachmann and televangalist Pat Robertson both claimed that the hurricane and the earthquake that preceded it on the East Coast were acts of God designed to warn politicians to be fiscally prudent and morally conservative). It is a party that has congressional leaders that openly gloat that their primary objective is to make the Obama administration fail, even if it takes forcing government agency closures as arguments over budgetary matters continue at an impasse (the agreement on the debt ceiling is only a temporary measure). This includes trying to tie federal disaster relief to budget cuts in other areas. It a party that is openly disloyal and disrespectful of the presidency, and which has open champions on conservative media outlets that are equally disrespectful and delusional in their approach to “correcting” the multiple ailments afflicting the country. These people dream of an Ozzie and Harriet la-la land where Negros, Hispanics, Arabs and other non-whites know their place.

The trouble for this crowd of neo-cons, bible-bashing fundies, xenophobes, racists, isolationists, revanchists and neo-imperialists (and yes, there is a bunch of contradictions layered in there) is that their proposed solutions to the US malaise avoid the major issue and in fact will serve to exacerbate it: growing class differentials, both in income and opportunity. In the US today, the top 400 individual income earners control as much of the national wealth as the bottom 60 percent of the population. This is what I have called in the past the “Brasilianisation” of US society, where income inequalities become monumental, except that now Brazil is thriving and growing its middle class by using the type of state-managed macroeconomic policies so reviled by the American Right, to the point that it beginning to look like what the US once was (no insult to Brazil intended).

Yet the Tea Baggers and GOP want to continue tax breaks for the upper ten percent of the population and corporations (some of whom have paid no net tax in the last five years) while drastically reducing public funding for so-called “entitlements” like universal health care, welfare, education and infrastructure development. The new scapegoats, along with the traditional targets of brown-skinned immigrants, are public sector employees, who now are being targeted for layoffs and redundancies at both the state and federal level. A major target are public school teachers, whose pensions are considered to be a major drain on state coffers (in spite of the fact that these employees paid a significant percentage of their salaries into their pension funds).

Behind all of this is open hatred of unions to the point that some GOP candidates want to eliminate them entirely. Bachmann, for example, wants to disestablish the National Labor Relations Board, a non-partisan oversight body established by FDR as part of the New Deal that encourages the right to collective bargaining and union representation in the workplace (but not closed shops). Anti-union governors have emerged in several states (most notably in Florida, Minnesota and Wisconsin) using union-bashing as a populist tool in pursuit of fiscal reform. Given president Obama’s conciliatory and compromising stance vis a vis GOP demands (some have called it a sell-out), cracks in the Democratic support base are starting to show, with the labor movement, Congressional black caucus and Hispanic leaders all denouncing his retreat from the “progressive” (as much as you can be in the US)  policies on which he campaigned. This augers poorly for his re-election chances in 2012, although given the dog-and-pony show that is the GOP candidate list, he remains the default option.

Of course, these same reactionaries want the US to maintain a global military presence (now in more than 80 countries) that can strike at any adversary, real or imagined (recall the invasion of Grenada under a previous Republican president). They fail to understand that keeping a global war machine requires and exceptional level of public funding through taxation, and that the 100+ trillion dollar US public debt is in large measure due to the Bush 43 administration’s deficit-spending pursuit of two wars of occupation (one of necessity, one of choice) that is currently costing 1 million dollars per deployed soldier per day (one only has to think of the logistics lines and cost of equipment to see how these figure tallies up).

Rather than push to withdraw or downscale the US foreign military presence these same folk preach about the need to maintain the US role as global policeman, particularly in light of the re-emergence of China and Russia as strategic rivals along with the threats posed by states such as Iran and other middle powers that fail to adhere to US dictates. They deny that they are imperialists, but in order play the role of world cop the GOP is willing to sacrifice the roots of domestic stability, in the form of an equitable tax base and the robust provision of public goods and services.

This brings up what the GOP and Tea Party extremists cannot see and what their policies will aggravate: class conflict. The US has always been good at deliberately down-playing class conflict in favour of racial tensions, cultural differences and issues of social choice. During times of plenty, say the 15 year period between 1993 and 2008, the underlying class divisions in US society could be more readily submerged by these distractions, making the electorate easily manipulable by the corporate-political elite that benefited the most by the macro-economic policies of the last two decades. But in the last three years, as the same economic elites who plunged the US economy into recession were awarded corporate bail-outs by both the Bush 43 and Obama administrations, millions of “ordinary” Americans have lost their jobs, their homes and their future prospects. Now, rather than providing the federal safety net as a stop-gap against further social dislocation and the unrest that it brings, the GOP is successfully pressuring the federal government to remove key components of the fundamental social contract that has underpinned US society since the 1960s.

The proposed conservative roll back ignores the fact that what got the US out of the Great Depression, the New Deal, was founded on a federal job creation program, and that the Great Society of the 1960s was rooted in the expansion of civil rights tied to equal opportunity access promoted and enforced by the federal government. Instead, the American Right has adopted a “survival of the fittest” approach in no small part because they are the fittest to survive given who their economic benefactors are. The reality is that their proposed remedies are exactly the opposite of what has worked in the past to revitalise the economy and will have negative consequences far in excess of whatever benefit they hope to achieve.

What the GOP, Tea Baggers and the frothing-at-the-mouth media conservatives are blind to is the fact that their policies will accentuate class differences, leading to increasing alienation and dispair amongst those for whom the American Dream no longer exists. One only need to look at the UK riots to understand where such policies lead to, yet the likes of the infamous Koch brothers (billionaires who are funding the Tea Party movement) continue to push for policies that reduce the ability of the federal government to help those at the bottom of the socioeconomic totem pole.

There is irony in the fact that the Tea Party movement is made up of mostly white middle  and working class people yet advocates tax and fiscal policies that openly favour the rich and corporate interests instead of their own. In fact, the Tea Party movement is backing policy prescriptions that are a thinly veiled attack on the working poor and lower middle classes as much as they are a coddling of the wealthy. But then again, false consciousness is a common feature of declining class fractions confronted with the evolution of society in which they no longe matter, as they seek to cling to a nostalgic version of the past in which they served as the motor force of the economy and culture. They no longer are, and the conservative correctives will ensure that it stays that way.

The bottom line is that like the fools who ignored warnings about the hurricane, the American Right is plunging the country towards its worst nightmare: the day in which class conflict emerges out into the open and cannot be disguised by so-called “culture wars” and the other customary diversions that have been used successfully in the past. When that day comes not only will the discourse of politics be different. So too will be social interaction, which will begin to adopt centrifugal rather than centripetal characteristics as the fabric of society begins to fray.

NB: A note for Lew: you will be interested to know that television advertising in the US increasingly sees the use of military personnel (or actors protraying armed service people) in a variety of huckster roles, from selling donuts to cars to anxiety medicine. Most of the military personnel being potrayed (including female soldiers) are depicted as being from the enlisted ranks, as a common touch with the consuming masses. Since you are the media analysis guru I shall leave it to you to ponder the implications of the military presence in US advertising, but if it is true that advertising reflects more general social preferences, trends and mores, then from my non-expert vantage point it sure looks like the militarisation of public discourse is near complete (which only will make the impending clash of class interests that more alarming).

Really too big to fail.

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Market responses to the US debt crisis and financial downgrade have been like king tides as of late, and inevitably speculation centers on the possibility of a “double dip” global recession (this speculation is more than rhetorical. Gold and other precious metal prices have spiked overt the last three weeks as investors flee the stock, bond, commodity and currency markets). There is much talk, some fearful and some hopeful, of a global meltdown of epic proportions. The argument goes that downgrading the US credit rating devalues US Treasury bonds and the dollar, which slows US private investment at home and abroad, decreases domestic consumption, increases unemployment and generally prolongs the recession begun in 2008. This ripples negatively across the globe given the interconnectivity of commodity chains and the central role of the US in them. Be it on the Left or the Right, the belief in state bankruptcy is taken as an article of faith.

The reality is different. What is happening is a fiscal crisis of the Western State rooted in a cyclic crisis of capitalism. Arguments about the blown-out US public debt obscure the fact that it is the result of the same conditions that produced the 2008 recession and which are at root the cause of the next one. For the last thirty years the ‘bubble” of private debt was replicated by the US Government, in the last decade under the strain of simultaneously fighting two prolonged low intensity conflicts. In Europe public debt was in part procured in order to compensate for private debt (via the provision of subsidized entitlements). Capital was lent on looser and looser terms as interest payment calculations came to rival returns on productive investment as the dominant macroeconomic logic. The market in financial derivatives boomed, then busted, bringing with it a crisis in small scale property ownership at the same time that major manufacturers were being bailed out by the US government.

There is a difference, however, between the private sector and the State when it comes to fiscal crises. The analogy between States and firms is overdrawn. Firms go bankrupt; States do not. States may default on loans and suffer the indignities of downgrading by financial institutions, but they do not go out of business. The reason is simple. States  with a presence in the global economy may fail but they do not cease to exist.

Modern states are political entities with other measures of power beyond economic resources, are rooted in historical and cultural ties within more or less fixed borders, have distinct political systems and political regimes that govern them, and are therefore sheltered from the hard realities that beset wayward market agents in a globalised system of production, service and exchange. More importantly with regard to the social and political relations of production, the modern nation-state supercedes the market at any specific moment even while being generally subject to its rhythms and dictates. It is, after all, a capitalist type of state that is not reducible to the productive apparatus.

Imagine even if the US defaulted on its current obligations. Its credit rating would fall further in parallel with the value of its currency, but how long will that last? Even if the US fails its financial obligations, it would be the markets that push for a debt restructuring favourable to it.  As the core of the global economy, the US is simply too big to fail because its financial collapse would reverberate widely and deeply through the world. In fact, with the exception of undeveloped failed states and microstates with minimal economic resources to promote, virtually all modern states can survive a fiscal crisis and default.

 Take Argentina, which in 2000 defaulted on its foreign loans, uncoupled its currency from the US dollar and then renegotiated the terms of its obligations. Since most of the outstanding balance was interest rather than principal, foreign creditors were eventually forced to settle on terms favourable to the Argentines (about 60 cents on the dollar lent). The weakened Argentine peso stimulated commodity exports and attracted foreign investment in resources and primary goods. In spite of endemic corruption, political interference and a multitude of market inefficiencies, over the last five years Argentina has averaged growth rates in excess of six percent and attracted the highest levels of foreign investment ever even while maintaining a large public deficit.

 Greece, the poster child of all that is supposedly wrong with governments and societies that do not couple entitlements with production, is another such case. What would happen if Greece defaulted on its recently rescheduled loans? Will it cease to be? what it could do is drop out of the Eurozone, replace the Euro with the much less expensive drachma, and print money to fund its domestic obligations. Somee foreign investors may flee, but local capitalists will continue to engage the domestic market, people will continue to consume, albeit at lower rates with regards to imported goods, tourists will still flock to see the historical sites and visit the islands, and the country will continue to exist. In fact, should it be successful at restructuring its economy on more internally-focused terms out from under the straitjacket of Eurozone obligations (say, by making its tax collection system more rational and efficient), it could serve as a model for the other “PIGS” nations—Portugal, Ireland and Spain—as well as Italy.

It was Northern European, mostly German capital, directly and channeled through the European Central Bank, which sought to recycle in the European periphery the super-profits accrued during the last two decades of derivative market expansion. These are the creditors who took the risk in the PIGS and who now demand debt repayment schedules rooted in austerity measures and privatization programs. They are also the beneficiaries of a strong Euro, unlike the weaker Southern European economies now under siege. Should debtor countries in Europe decide to reconfigure their economies around a devalued national currency a la Argentina, the European Union will be finished as a currency regulator. Here the sub-regional ripple or contagion effect makes each of the PIGS too big to fail, something that is magnified in the case of the US. Loss of credit rating and a high debt to GDP ratio, in others words, does not translate into State bankruptcy.

 The larger point is that states can default but they cannot be bankrupted because they are not solely economic agents but instead sovereign political actors with interests that transcend a financial bottom line. They can be upgraded and downgraded as financial risks, but even if investment falls and inflation rises, they will not disappear. Think of Brazil and Argentina in the late 1980s when inflation ran at over 1000 percent per year. Did they disappear? Did all foreign investment dry up? Did local markets crash?

Truth be told, capitalism, led by finance capital, was on overheated overdrive for the two decades before 2008, only slowing down briefly after events such as 9/11, even when objective conditions advised against the maintenance of the macroeconomic policies private agents used to calculate the speed of their returns. Western States emulated private agent logics, whereas Asian banks and sovereign wealth funds  were less keen to adopt derivatives-led financial approaches backed by increasingly unsecured loans (although some of that did creep into Asian markets as regional economies attracted Western investment).

Here is where global networks come in. Rather than wage war on States with economies in default, other States that are debt free or less indebted work to cover their investments, and those of their private agents, in the debtor States. This means that even if private agents in the debtor States fail as a result of their market excesses or miscalculation, and State treasuries do n not have enough reserves to cover their debts, States remain open for business, perhaps even on more favourable terms depending on the nature of sovereign debt restructuring agreements (public debt for equity swaps are one measure that can improve State efficiencies as a result of restructuring). Inefficient producers are expelled from the market; inefficient States muddle along.

The entire Western capitalist combine was due for a retrenchment given the downward slope it has been on since spending, both public and private, exceeded productive output in material goods and services. So long as money could be made off of lending money and risks were passed on to increasingly lower-level actors, early 21st century capitalism saw States tax and spend without coherent productive purpose (which mirrored the approach of the financial markets). This was a good political calculation but not a sound economic grounding for future productive growth within current capitalist parameters. Thus the turn towards private sector retrenchment in 2008, with public sector retrenchment now following.

We hear about the demise of various States because they can no longer afford to repay what they have borrowed in order to maintain whatever it is that is considered precious to national identity and political stability–public goods and entitlements in Europe, a war machine in the US. Retrenching Western States may not be able to provide these services in the measure they used to, but thy remain (however diminished) as linchpins of an international system that has its origins in the Treaty of Westphalia rather than Bretton Woods or the Washington Consensus. States are the ties that bind that global system of exchange, and Western States continue to have a central role in it even as the system moves towards increased multipolarity.

Markets and politicians alike need to be cognizant of this fact, because as Keynes pointed out, it is political conditions, not economic conditions, that are the best guarantors of long-term investment. Rather than the economic particularities of a given investment climate at a specific moment in time, political stability offers better conditions for secure future private return. A stable national polity is the best guarantee of profit even if the public books are not balanced. That is the political cost for the social peace that is the basis for economic stability.

Ironically, it was the short-term focus of the macroeconomic logics that propelled the “bubble” that led first to the financial crisis of 2008 and now to the current conditions of political impasse and social instability in many liberal democracies. That is where the convergence of the fiscal crisis of the Western State and the cyclic crisis of capitalism can lead to liberal democratic State failure: when it produces a crisis of legitimacy of the political elite, often confused with regime crisis, that once rooted in and superimposed on the economic downturn and social unrest constitutes an organic crisis of the State. The UK evidences these type of pre-conditions.

Rather than demand zero-sum tax cuts and a diminished State role in guaranteeing the social relations of production,  the priority of the market during a State fiscal crisis should be to to express confidence in the State because delegitimisation of the latter is an absolute guarantee of disasterous market consequences for the private actors involved with them in the event that they are overthrown or fragment. That is where market ideologues have failed in their basic obligation: to help foster the political and socio-economic conditions in which stable rates of private return are generated. Instead, they are exacerbating the crisis with their jitters, demands and panic trading. This will not lead to an organic crisis in most liberal democratic states (which will muddle along), but it could produce legitimacy crises in newly democratic states or those with significant social cleavages. Even then the prospect of State, as opposed to regime or private sector failure, is unlikely.

All of which is to say that when it comes to the fiscal crises of modern Western States, this too shall pass.