War and the Market State

A tip o' the blog to bradspangler.com for drawing my attention to these articles.

Which led to inadvertent connections between two articles. Because again in the syncronistic universe that is the WWW, I was looking for his link to this, Counter-Economics: review of excellent book on smuggling and came across another article, which describes the actual nature of what folks mistakenly call globalization.

The creation of the new market states is the result of NAFTA, the EU, and other new evolving models of contractual corporate and state cooperation. They are the WTO, APEC , etcagreements and meetings that are occuring that have set in motion the evolution of the market state that Bobbitt speaks of below.

The War in the Balkans followed by the war in Afghanistan followed by the war in Iraq is not just the war of Empire and Imperialism but of private armies and private contractors, becoming in effect a state, since they provide privatized functions of the state as I have blogged about.See; War! What's it Good For? Profit

The attack on the Balkans was an attempt to end the last vestiges of State Capitalism and pound the Serbians into submissive acceptance of the privatization of the State through strategic bombing of industries.

It is the same with Iraq. It too was the last state capitalist country in the Middle East that had to be privatized. The other countries were less vulnerable since they are hierarchical societies that had opened their markets to capitalism, while remaining fuedalistic social constructs.

An interesting analysis of this concept of the War of the Market State can be found at Global Guerrillas which reviews this book;

The Shield of Achilles: War, Peace, and the Course of History

by Philip Bobbitt

" A new form of the State — the market state – is emerging from this relationship in much the same way that earlier forms since the 15th century have emerged, as a consequence of the sixth great epochal war in modern history.

The “market-state” is the latest constitutional order, one that is just emerging in a struggle for primacy with the dominant constitutional order of the 20th century, the nation-state. Whereas the nation-state based its legitimacy on a promise to better the material well-being of the nation, the market-state promises to maximize the opportunity of each individual citizen. The current conflict is one of several possible wars of the market-states as they seek to open up societies to trade in commerce, ideas, and immigration which excite hostility in those groups that want to use law to enforce religious or ethnic orthodoxy.

A state that privatizes most of its functions will inevitably defend itself by employing its own people as mercenaries-with equally profound strategic consequences. "

So if the exisiting nation states are using private armies, and further privatization due to the transformation of these new models of transnational corporate/state agreements creates the historic conditions for the development of market states then the current conflict called the War on Terror is a conflict between the black market states, such as Bin Laden Inc. against 'legitimate' transnational corporate states like Halliburton USA Inc.

In fact all of the current 'Stan states (Afghanistan, Kyhrigistan, etc.) which were once colonial outposts of the Soviet Union and were not fully developed state capitalist economies are now home to much of the black market. And while they are dictatorships still, they are ones that capitalism finds friendly, and able to do business with. But within these states exists another state, that is international in scope and is linked with organized crime, international intelligence agencies, terrorist networks, drug smugglers. etc. etc.

The way these black market states are funded is through what Libertarians call counter economics. Piracy by any other name. The very origins of the primitive accumulation of capital under fuedalism that gave rise to banking, trade and eventually full blown capitalism.

The Necessity of Gangster Capitalism: Primitive Accumulation in Russia and China

It is useful at this point to quote from the book review of Illicit from Global Guerrillas

Moises Naim, the editor of Foreign Policy Magazine, has an excellent new book called Illicit on the rise of global smuggling networks. It's a must read.

Globalization Melts the Map

Moises copiously documents how globalization and rampant interconnectivity has led to the rise of vast global smuggling networks. These networks live in the space between states. They are simultaneously everywhere and nowhere at the same time. He shows how these networks make money through an arbitrage of the differences between the legal systems (and a desire to prosecute) of our isolated islands of sovereignty. He also shows how their flagrant use of corruption can enable them to completely take over sections of otherwise functional states.

By all accounts the amount of money involved is immense. In aggregate, the networks that form this parallel "black" global supply chain, have a "GDP" of $1-3 trillion (some estimates are as high as 10% of the world's economy) and are growing seven times faster than legal trade. These networks supply the huge demand for:

• Drugs (both recreational and pharmaceutical).
• Undocumented workers (for corporations, home services, and the sex trade).
• Weapons (from small arms to RPGs, many come from cold war arsenals).
• Rip-offs of intellectual property (from digital content to brand named consumer goods).
• Laundered and unregulated financial flows.

This supply chain isn't run by the vertically integrated cartels and mafias of the last century (those hierarchies are too vulnerable, slow, and unresponsive to be competitive in the current environment). The new undifferentiated structures are highly decentralized, horizontal, and fluid. They specialize in cross border movement and therefore can handle all types of smuggling simultaneously. They are also very reliant on modern technologies to rapidly transport and coordinate their global operations.

I would also reccomend Robert Naylors Hot Money, though dated, from the 1970's, it was one of the first to talk about International Finance and the black market and its impact on the bank meltdowns like BCIC and the connection of the banking industry to the black markets and their involvement in the debt crisis in the developing world. It was published by Black Rose books. A new edition is out as well he has written another work along similar lines, critiquing international relations, crime and hot money, entitled the Wages of Crime.

Thus the War on Terror is a war on two fronts. One to smash and transform the last outposts of state capitalism in Europe and the Middle East, and a war on the unregulated market.

Global Guerrillas says; The similarity between these commercial networks and those of modern terrorism (my global guerrillas) is not incidental.

Nor is it incidental that the American Empire is sowing the seeds of its own self destruction, not only in expensive military operations that rack up thousands of corpses and trillions in deficits, but in the fact that like the British Empire before it in order to finance these wars, it too relies on the black market. The British Empire set itself up for decline as it persued its Opium Wars against China. The US set itself up in the 1980's providing stinger missles to the Mujahadin in Afghanistan who paid for them in opium money. Who transported them through smuggling routes, still with us today used by Bin Laden Inc.

And quoting Bobitt again;
The current conflict is one of several possible wars of the market-states as they seek to open up societies to trade in commerce, ideas, and immigration which excite hostility in those groups that want to use law to enforce religious or ethnic orthodoxy. States make war, not brigands; and the Al Qaeda network is a sort of virtual state, with a consistent source of finance, a recognized hierarchy of officials, foreign alliances, an army, published laws, even a rudimentary welfare system. It has declared war on the U.S. for much the same reason that Japan did in 1941: because we appear to frustrate its ambitions to regional hegemony.

Capitalism has outgrown the Nation State. It reguired it for its period of ascendency. Now that it is the real domination of everything , of all social relations it needs a new state, a market state. One that can continually destroy its overproductive capacities. As capitalism evolves better technonological production, increases productivity and reduces the need for real labour, it amasses capital, which becomes unproductive. It is here that the new market state can use this capital to create permanent war, small scale localized war, that does not threaten its global expansion, but allows it areas for wide scale destruction of productive capabilities to offset its cancerous growth.

If war is privatized and all state functions are privatized, then the individual is no longer identified as a citizen, or as a wage labourer, but as 'free' individual, a contractor in a market state. Capitalism will have evolved to its logical conlusion; that we remain wage slaves but no longer to a particular boss or business but to the market. Our alientation will be complete. And it will be a society of barbarism, of all against all.

Labour 'is and remains the presupposition' of capital (Marx, 1973, p. 399). Capital cannot liberate itself from labour; it depends on the imposition of necessary labour, the constituent side of surplus labour, upon the world's working classes. It has to posit necessary labour at the same time as which it has to reduce necessary labour to the utmost in order to increase surplus value. This reduction develops labour's productive power and, at the same time, the real possibility of the realm of freedom.

The circumstance that less and less socially necessary labour time is required to produce, for want of a better expression, the necessities of life, limits the realm of necessity and so allows the blossoming of what Marx characterised as the realm of freedom. Within capitalist society, this contradiction can be contained only through force (Gewalt), including not only the destruction of productive capacities, unemployment, worsening conditions, and widespread poverty, but also the destruction of human life through war, ecological disaster, famine, the burning of land, poisoning of water, devastation of communities, the production of babies for profit, the usage of the human body as a commodity to be exchange or operated on, the industrialisation of human production through cloning etc.

The existence of Man as a degraded, exploited, debased, forsaken and enslaved being, indicates that capitalist production is not production for humans - it is production through humans. In other words, the value form represents not just an abstraction from the real social individual. It is an abstraction that is 'true in practice' (cf. Marx, 1973, p. 105). The universal reduction of all specific human social practice to the one, some abstract form of labour, from the battlefield to the cloning laboratory, indicates that the separation which began with primitive accumulation appears now in the biotechnical determination to expropriate human beings. Capitalism has gone a long way. Indifferent to life, it 'was satisfied with nothing more than appropriating an excessive number of working hours' (Dalla Costa, 1995a, p. 21). It is now engaged in the production of human-workers.

The Permanence of Primitive Accumulation: Notes on Social Constitution