Chapter 5 - The World Hierarchy
-Who runs the world? Surely the USA
-This implicitly assumes the world order is not anarchic but run in an orderly way
-The USA can manage events in its favour but the chaos around the world clearly shows that’s not the same thing as managing the world
-Norfield uses five measures to gauge a country’s econo-politico status:
-Norfield cites mountains of tiresome data to support this point - IMF reports, GDP, FDI, Bank of International Settlements data, UN security data
His conclusions, not surprisingly support the Anglo-American alliance idea.
My only question is if China is now in #1 or #2 and is Japan still in top 5?
Capitalism and the state
-Deciding the ownership of multinational corporations is tricky
-BP is only 40% owned by British residents so is it still ‘British’?
“In the past two decades, it has been common for all major stock exchanges to encourage listings and share offerings by companies seeking large volumes of funds from international sources. For this reason, London’s FTSE 100 equity index does not represent the domestic British economy or even consist only of British companies. “
-Despite this ambiguity, there is still a core of companies that a nation-state will tend to back as they are viewed as ‘their own’
- This doesn’t make capitalist companies patriotic or sentimental about ‘home’
-Despite globalisation corporations still depend on national power to resolve disputes. You can’t call McDonald’s to assist you with copyright infringement, or if IBM China gets in trouble you can’t call the Chinese president for help, or call Microsoft to secure sea lanes in the Pacific.
-More powerful capitalist countries set the terms of business
-Corporations headquartered somewhere tend to be the main beneficiaries of national attention
-The more resources a national-state can marshal, the more powerful the ‘national’ capitalist can become
The State and Finance
-The state determines frameworks for the national monetary system, like deciding what is ‘legal tender’
- Before central banks, states regulated everything but now CB’s are the main state tool for managing the monetary system
-The earliest CBs were private companies with government backing - Sveriges Riksbank and Bank of England
- Instability of a private banking system led to central banks taking on the role of ‘lender of last resort’ - in the US in 1913
-”Whatever the fantasies of ‘libertarian’ pundits in the US, no major capitalist company wants to operate in an economy where every bank issues its own currency, or where the paper currency issued has to be fully backed by gold to prevent ‘corruption’ by the government.”
- Private capitalist banks have special access to central bank credit but are regulated. Lending is lightly regulated while taking deposits has more rules.
- “My argument is that imperialism is not the same thing as colonial rule, and should not be understood only in terms of some countries dominating others through military or political pressure. A country does not have to rule politically over another for it to be imperialist, and imperialism did not die out with the end (almost) of colonialism.”
-Imperialism is:
Monopoly and Imperialism
World projection of power
-Who runs the world? Surely the USA
-This implicitly assumes the world order is not anarchic but run in an orderly way
-The USA can manage events in its favour but the chaos around the world clearly shows that’s not the same thing as managing the world
-Norfield uses five measures to gauge a country’s econo-politico status:
- economy size
- ownership of foreign assets
- international prominence of its banking sector
- status of currency in FX trading
- military spending
- Few countries have much power or influence outside the G20-Norfield cites mountains of tiresome data to support this point - IMF reports, GDP, FDI, Bank of International Settlements data, UN security data
His conclusions, not surprisingly support the Anglo-American alliance idea.
My only question is if China is now in #1 or #2 and is Japan still in top 5?
Capitalism and the state
-Deciding the ownership of multinational corporations is tricky
-BP is only 40% owned by British residents so is it still ‘British’?
“In the past two decades, it has been common for all major stock exchanges to encourage listings and share offerings by companies seeking large volumes of funds from international sources. For this reason, London’s FTSE 100 equity index does not represent the domestic British economy or even consist only of British companies. “
-Despite this ambiguity, there is still a core of companies that a nation-state will tend to back as they are viewed as ‘their own’
- This doesn’t make capitalist companies patriotic or sentimental about ‘home’
-Despite globalisation corporations still depend on national power to resolve disputes. You can’t call McDonald’s to assist you with copyright infringement, or if IBM China gets in trouble you can’t call the Chinese president for help, or call Microsoft to secure sea lanes in the Pacific.
-More powerful capitalist countries set the terms of business
-Corporations headquartered somewhere tend to be the main beneficiaries of national attention
-The more resources a national-state can marshal, the more powerful the ‘national’ capitalist can become
The State and Finance
-The state determines frameworks for the national monetary system, like deciding what is ‘legal tender’
- Before central banks, states regulated everything but now CB’s are the main state tool for managing the monetary system
-The earliest CBs were private companies with government backing - Sveriges Riksbank and Bank of England
- Instability of a private banking system led to central banks taking on the role of ‘lender of last resort’ - in the US in 1913
-”Whatever the fantasies of ‘libertarian’ pundits in the US, no major capitalist company wants to operate in an economy where every bank issues its own currency, or where the paper currency issued has to be fully backed by gold to prevent ‘corruption’ by the government.”
- Private capitalist banks have special access to central bank credit but are regulated. Lending is lightly regulated while taking deposits has more rules.
- “My argument is that imperialism is not the same thing as colonial rule, and should not be understood only in terms of some countries dominating others through military or political pressure. A country does not have to rule politically over another for it to be imperialist, and imperialism did not die out with the end (almost) of colonialism.”
-Imperialism is:
- economic privilege reinforced by monopoly control of industry
- backed up by powerful states
-When the media talk about an ‘international community’ keep in mind the chart in 5.1Monopoly and Imperialism
- Dominant country capitalists have many means to exploit weaker countries
- Undermining industries
- Restricting exports
- Subsidies of their own exports
- Undermining governments (easier than ever with social media!)
- ‘Regime change’
- Lenin believed imperialism is the monopoly stage of capitalism
- Price fixing, price gouging, are some tools of monopoly
- IN 2014, 41% of phones were made by only 3 companies, Samsung, Apple, Microsoft (very curious what that looks like now)
- The formation of ‘global value chains’
- International companies employ foreign suppliers to deliver goods/services for use in final production
- Apple -> Foxconn
- Monopoly power is good for the monopolist but less good for the national economy where it operates
- So usually there is a regulatory body to limit abuses of market power
- Sherman Anitrust Act of 1890
- Rockefeller refined 80% of US oil and dominated production, transport for energy
- UK ‘Competition Commission’
- These agencies have done little to stop the drift towards monopoly power
- Samsung is singled out by Norfield
- State-backed company rescues have promoted mergers and takeovers
- Norfield singles out G4S, the world’s largest security company for criticism, citing its failures at the 2012 Olympics
- States naturally don’t care about its own market domination internationally, only domestically
- The EU has adapted anti-monopoly legislation with the EU area, which has taken some action against price fixing
Monopoly today
- “Worldwide production of most of the key commodities of modern capitalism, and the provision of most of its key services, is today dominated by a small number of companies.”
- 2011 auto production: ⅓ is from GM, Volkswagen, and Toyota
- 13 companies account for ¾ of output
- Norfield goes on to list many monopolies.
- He cites the example of Glencore, the largest Swiss company, who controls more than half the tradeable market in zinc, copper, and ⅓ of seaborne coal.
- Its CEO Marc Rich, was indicted for tax evasion and for making oil deals with Iran
- He was pardoned by Bill Clinton on his last day in office. (lucky!)
- Big companies in turn own large chunks of other companies, further concentrating power
World projection of power
- A defining feature of imperial capitalism is nation-states supporting their ‘own’ large corporations by protecting intellectual property rights and fronting trade delegations
- Monopoly capital accumulation is the normal result of capitalist business development
- This ability to secure protection from a nation-state is more important to define imperialist companies than their size, wealth or or global importance, but usually the largest companies are the ones that can do this
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