Friday, January 6, 2017

Connect the Dots: Obama Drones Threat Capital Inequality

By perpetuating the idea that we live under threat of terrorism, and that drones are the answer, Obama has guaranteed the economic inequality engine will continue to function unimpeded for a very long time to come . . . .

"Obama's embrace of drone strikes will be a lasting legacy."
(Graphic: @pariewolf)

Barack Obama is scheduled to give his farewell speech in Chicago on January 10, 2017.

Over the past six years, I have written again and again about the expansion of drone killings under Obama. The graphic above reminded me that I should not let the occasion of Obama's "legacy" speech pass without saying what his real legacy will be.

As Mark Landler explained in The New York Times this past summer, Obama's legacy really does seem to be the use of military force by the US around the world in an uninterrupted way, while still operating beneath the notice of the vast majority of US people.

The use of drones perfectly encapsulates the Obama legacy: as long as you keep boots off the ground, you can assert US military power anywhere and everywhere without alarming the public. If a few spoilsports object, you can point out that drones are limited, cost-effective, high-tech. (And did we mention there are no boots on the ground?)

As someone who has called written about this phenomenon as "permawar" . . . and worked with drone warfare opponents throughout the country . . . and even tried revoking Obama's Nobel Prize . . . I enjoy a kind of satisfaction in seeing other voices affirm my reading of the situation.

 . . . HOWEVER . . .

I've come to the conclusion that it is not enough to simply protest drone warfare.

We need to connect the dots between this new way of war and the economic crisis that has brought Donald Trump to power.

Inequality: "Where's Mine?"

WHERE'S MINE? Inequality in the US
and the Military-Industrial Complex
About a year ago, I took a stab at connecting the problem of inequality in the US to the problem of military spending and war.

I shared data on the real extent of economic inequality in the US, and noted that this information is widely available. "I'm wondering when people are going to decide to do something about it," I wrote, "and when they're going to begin to ask about the connections between inequality and the military-industrial complex."

I think we got the answer to the first half of my query with the election of Donald Trump.

How US Military Spending Contributes to Economic Inequality

US government spending:
military vs "all other"
(More details here.)
To many of us, it seems obvious that the connection between the enormous levels of US military spending and economic inequality is that tax money is used for war instead of to make the lives of people in the US better. ("Money for jobs and education, not for war and occupation.")

As a very loyal but honest critic of the antiwar movement has said, "We just can't seem to get any traction with the money argument for opposing war."

We're not getting traction with the simple argument -- "Stop spending so much money!" -- and we're also not getting traction with the more sweeping argument that takes the form of a critique of "Neoliberalism."

In my opinion, the former argument fails because it is too simplistic: it's just too difficult for people to detach their idea of today's military spending from the idea of the "Good War" and the "arsenal of democracy" -- the notion of "security" validated for them by WWII. They know just enough about today's regional conflicts and militant activities -- i.e. the warlike ways of "those people" and their resort to "terrorism," but nothing about the role of the US and other countries in fomenting same -- to reinforce the idea that military spending is unavoidable. In-district military spending (jobs) seals the deal.

(Put another way: Eisenhower's warning about the military-industrial complex is too abstract to be helpful.)

The latter argument -- the critique of Neoliberalism -- is, in contrast, too wide-ranging and diffuse. At its core, it plays into exactly the psychology that perpetuates inequality, even in the face of grotesque inequities: people hear "freedom of opportunity" and they imagine it means "freedom of opportunity" for ordinary people. They imagine themselves, and people like themselves, getting a break.

No, we need a different argument.

Ideally, something with a conspiratorial edge to it.

Stacking the Deck

In my "Where's Mine?" post, I alluded to the work of Thomas Piketty. But it wasn't until I read Joseph Stiglitz's gloss on Piketty in his book The Great Divide that I was able to connect the dots.

Stiglitz explains that what Piketty is pointing out is that the 1% keeps getting richer and richer because something's out of whack. The wealth that they invest is able to keep earning super high returns, despite the normal expectation that, at some point, returns weaken. In particular, they have the ability to keep pumping money into emerging, high-growth economies, which will pay a higher return on capital, compared to older, low-growth, stable economies (read: the US).

Net Capital Flows to Emerging-Market Economies (1980-2015)
(Source: Advisor Perspectives)

(As the graph above shows, the past few years have seen phenomenally high levels of capital flow into emerging markets.)

Stiglitz says this can't go on indefinitely, but by the time it peters out, there is likely to be extreme inequality globally -- i.e. much worse than there is now.

What Stiglitz doesn't explain is this: what has prevented the market from correcting this situation?

In particular, I wondered about the risk of investing in those emerging markets. Having spent a large part of my career doing business in China (and other parts of Asia), I have always been very focused on the degree to which investments are put at risk by the absence of good information in those societies. (It has often seemed to me that there is a bubble in China, supported by perception that the overall market is growing so fast that the inability to monitor the true performance of individual investments is a minor concern.)

Stiglitz gives a clue that we should be looking in a different direction. He invites us to think about "rents." This refers to the idea of sources of assured returns -- think of an oil well or music royalties -- where the underlying asset is not involved in a complicated, risky operation like manufacturing or providing a service.

I think the answer to how the rate of return on capital all around the world can continue to remain high, despite the expectations of market theory, is that capital is able, in effect, to find unnatural ways to shield it from risk in those "other" countries. The returns are more like "rents" than they are like "dividends."

Moreover, I think the most important "unnatural way" involves the threat of military force to protect capital -- i.e. the investments of the 1% from the US (and the rest of the West).

"America's most elite troops deployed to 138 nations in 2016 . . . ."
(Source: Nick Turse in Truthout)

Conveniently, Nick Turse just published a piece with the updated map above of elite troops deployments and US military installations around the world.

To complete the picture, all you need to do is think about the fact that the places in-between are all covered (or coverable) by drone flights.

This picture is not keeping the world safe for democracy; it's keeping the world safe for capital.


As someone who has grown up in the US, it is not automatically possible for me to understand that the presence of US military forces around the world necessarily translates into the message: "No US financial losses allowed here." Do people in foreign countries really think that accepting US investment means they have to guarantee the returns of those US people? Shouldn't foreign investors have to face normal financial risk, just like everyone else?

By coincidence, I noticed a reference the other day by Howard Zinn to "Instances of Use of United States Armed Forces Abroad." A few of the examples Zinn cites:

1853-1854 - Japan. Commodore Matthew C. Perry and his naval expedition made a display of force leading to the “opening of Japan."

1859 - China. July 3 I to August 2. A naval force landed to protect American interests in Shanghai.

1860 - Angola, Portuguese West Africa. March I . American residents at Kissembo called upon American and British ships to protect lives and property during problems with natives.

1893 - Hawaii. January 16 to April 1. Marines were landed ostensibly to protect American lives and property, but many believed actually to promote a provisional government under Sanford B. Dole. This action was disavowed by the United States.

And the list continues . . .

1912 - Honduras. A small force landed to prevent seizure by the government of an American-owned railroad at Puerto Cortez. The forces were withdrawn after the United States disapproved the action.

1917-1922 - Cuba. U.S. forces protected American interests during an insurrection and subsequent unsettled conditions. . . .

1922 - Turkey. September and October. A landing force was sent ashore with consent of both Greek and Turkish authorities to protect American lives and property when the Turkish Nationalists entered Smyrna.

1965 - Dominican Republic. The United States intervened to protect lives and property during a Dominican revolt and sent more troops as fears grew that the revolutionary forces were coming increasingly under Communist control.

1988 Panama. In mid-March and April 1988, during a period of instability in Panama and as pressure grew for Panamanian military leader General Manuel Noriega to resign, the United States sent 1 ,000 troops to Panama, to “further safeguard the canal, U.S. lives, property and interests in the area.” The forces supplemented 1 0,000 U.S. military personnel already in Panama.

Don't take it from me. The official US history says that the US military intervenes again and again and again to protect US capital. ("Instances of Use of United States Armed Forces Abroad, 1798-2015" by the Congressional Record Service.) And that doesn't include CIA operations (e.g. 1953: Iraq, oil; 1961, Cuba; 1980s: Central America) or much of the post-WWII intervention in the name of "fighting Communism" (Korea, Vietnam, Laos, Cambodia), "humanitarian" purposes, or for fighting "terrorism" (Afghanistan, Pakistan, Somalia, Yemen) and "weapons of mass destruction" (2013: Iraq, oil).

Its easy to see why countries around the world understand that using the capital proffered from the US comes with a proviso: "You will guarantee that this cash injection brings nothing but upside. We expect rents in perpetuity."

Connecting the Dots: Obama - Drones - Threat - Capital - Inequality

I propose that the global movement against war should celebrate the departure of Barack Obama.

We should seize upon the recognition that the economic inequality that vast numbers of people in the US are angry about stems directly from the way the US military is used. (Including, in its newest form, the move toward drone warfare.)

If We the People have any gumption, we will see that the very reason we are becoming more and more impoverished, while the super-rich get richer and richer, is that our taxes are being used to stack the deck for the rich.

That giant sucking sound? It's the investment dollars that we need to refresh our productive economy fleeing to "rents" in distant parts of the world. And OUR tax dollars are paying for the military that guarantees the economic inequality engine will continue to function unimpeded for a very long time to come.

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