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The EU’s Crisis Is Global: Neocolonialism, Hyper-Financialization and Hyper-Globalization Come Home to Roost
The EU’s Crisis Is Global: Neocolonialism, Hyper-Financialization and Hyper-Globalization Come Home to Roost
The EU’s crisis isn’t limited to energy. It is a manifestation of the global breakdown of Neocolonialism, Financialization and Globalization.
The European Union (EU) was seen as the culmination of a centuries-long process of integration that would finally put an end to the ceaseless conflicts that had led to disastrous wars in the 20th century that had knocked Europe from global preeminence.
Wary of the predations of the U.S. and rising Asian powers, European nations sought the economic and diplomatic strength of a confederation that would be greater than the sum of its parts, a union that would restore Europe’s rightful place as a global power.
This worthy goal was undermined by the destructive dynamics of the past forty years: Neocolonialism, Financialization and Globalization.
These dynamics are unstable due to their internal contradictions. In classical colonialism, the Core dominates the Periphery with force, extracting economic value by exploiting the subject states’ commodities and forcing the colonies to buy the valued-added finished goods produced by the colonial power’s domestic economy.
This extractive model was at odds with the liberal worldview of the colonial powers which held self-rule and open markets as necessary to stable prosperity. The contradictions of classical colonialism led to its collapse as colonies broke free and the colonial powers were forced to navigate a more open global economy.
Beneath the glossy vibe of strength through unity, the EU institutionalized a Neocolonial Model in which some EU members are more equal than others, a divide that was starkly revealed in the debt crisis of 2011-2012.
I described the EU’s version of the Neocolonial Model in 2012: The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012)
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The Decline and Fall of the European Union
The Decline and Fall of the European Union
This exhaustion of the neocolonial-neofeudal model was inevitable, and as a result, so too is the decline and fall of the European integration/exploitation project.
That a single currency, the euro, would fracture rather than unite Europe was understood long before the euro’s introduction as legal tender on January 1, 2002. The euro, the currency of 19 of the 28 member states of the European Union, is only one of the various institutions tying the member nations of the European union together, but it is the linchpin of the financial integration touted as one of the primary benefits of EU membership.
Skepticism of the benefits of EU membership is rising, as citizens of the member nations are questioning the surrender of national sovereignty with renewed intensity.
The technocrat elite that holds power in the EU is attempting to marginalize critics as populists, nationalists or fascists, overlooking the untidy reality that the actual source of tyranny is arguably the unelected bureaucrats of the EU who have taken on extraordinary powers to strip the citizenry of member states of civil liberties (i.e. the right to dissent) and of meaningful political enfranchisement.
As I have patiently explained since 2012, the underlying structure of the EU is neocolonialism, specifically, neocolonial-financialization. Stripped of artifice, the financial institutions of the EU core have colonized the EU periphery via the euro and the EU and imposed a modernized system of extractive serfdom on the citizenry of the core and periphery alike.
To understand the neocolonial-financialization model, we must revisit the classic model of colonialism. In the old model of Colonialism, the colonizing power conquered or co-opted the Power Elites of the region, and proceeded to exploit the new colony’s resources and labor to enrich the core or center, i.e. the Imperial nation and its ruling elites.
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Neofeudalism Isn’t a Flaw of the System–It’s the System Working Perfectly
Neofeudalism Isn’t a Flaw of the System–It’s the System Working Perfectly
Fakery is always precarious: the truth about the asymmetries of power might slip out and spread like wildfire.
I’ve been writing about neofeudalism and its cousin neocolonialism for seven years:
500 Million Debt-Serfs: The European Union Is a Neo-Feudal Kleptocracy (July 22, 2011)
The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012)
The basic idea here is the socio-economic-political system is structured such that the only possible output is neofeudalism. In other words, neofeudalism isn’t a flaw in the system that can be changed with policy tweaks or electing a new president or PM– it’s the result of the system working as designed.
Neofeudalism is a peculiarly invisible hierarchical structure of power: The New Nobility (or aristocracy if you prefer) wields vast concentrations of political, social and financial power, and does so without the formalized aristocrat-serf relationships and obligations of classic neofeudalism.
We appear to be free but we’re powerless to change the power asymmetry between the New Nobility and the commoners. This reality is reified into social relations that are simulacra of actual power, pantomimes acted out in media-theaters to instill the belief that the foundational myths of democracy and social mobility are real rather than misleading shadows.
Neofeudalism is fundamentally a financial-political arrangement, marketed and managed by cultural elites who strive to convince us that we still have some shreds of power. These elites have a variety of tools at their disposal. One has been described by filmmaker Adam Curtis as pantomime: Trump says/does something outrageous, the Democrats cry “impeachment,” and so on.
This theater of pantomime serves two purposes: it projects a simulation of functional democracy that makes us believe impeaching one president and getting another one in office will change anything about the neofeudal power structure; it won’t.
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A world for the many, not the few
A world for the many, not the few
“The very notion of ‘charity’ erases a global history of slavery and oppression”. Asad Rehman applauds Labour’s ambition to overhaul neo-colonial development policy
Illustration by Andrzej KrauzeIn 1792, pioneering British feminist and social justice activist Mary Wollstonecroft wrote in her seminal book The Rights of Women, ‘It is justice, not charity, that is wanting in the world.’ Two centuries later, the shadow international development minister, Kate Osamor, a black feminist with a background in social justice activism, has anchored that fundamental truth in Labour’s vision for international development, ‘A World For the Many, Not The Few’. In doing so, she has committed the Labour Party to putting social justice at the heart of its international agenda and listening to the voices of those facing the greatest injustices: women in the global south.
For too long, politicians and, to their shame, many in the development sector have ignored the key driver of global poverty: neoliberal capitalism, a failed economic system whose rules are stacked in favour of corporate elites. They have stayed silent on the culpability of Britain in promoting unfair trade rules, creating new debt burdens, forcing privatisations and entrenching oppressive neo-colonial power dynamics on the international stage.
The new colonialism
The idea of ‘international development’ was constructed in the post-war era to cover up the deliberate ‘underdevelopment’ of the global south. During colonialism, Britain and the other industrial powerhouses had enriched themselves by extracting resources and slave labour from their colonies. They deliberately impoverished the south and, in the process, killed countless millions across Latin America, Africa and Asia. It is estimated that the UK extracted £600 trillion during its colonisation of India alone, reducing India’s pre-colonial share of the global economy from 27 per cent to just 3 per cent by the time the British left.
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Were Trade Wars Inevitable?
Were Trade Wars Inevitable?
Trade in which mobile capital is the comparative advantage is a system of Neocolonial exploitation of developing-world nations.
Were trade wars inevitable? The answer is yes, due to the imbalances and distortions generated by financialization and central bank stimulus. Gordon Long and I peel the trade-war onion in a new video program, Were Trade Wars Inevitable? (27:48)
Let’s stipulate right off the bat that trade is not necessarily win-win–the winners (corporations, financiers and the financial sector) have skimmed the majority of the gains, leaving the losers with a few pennies of dubious value.
Consumers’ got a nickel in savings and a disastrous decline in quality, while corporations reaped 95 cents of additional profits:
As I explained in Forget “Free Trade”–It’s All About Capital Flows (March 9, 2018), the comparative advantage into today’s global economy is mobile capital: i.e. access to low-cost credit in nearly unlimited sums.
Those with low-cost credit created by central banks issuing reserve currencies in nearly unlimited sums can outbid everyone else for productive assets.
In effect, trade in which mobile capital is the comparative advantage is a system of Neocolonial exploitation of developing-world nations which don’t have reserve currencies they can create out of thin air. Trade is exploitation via cheap credit.
The winners are the few at the top of the wealth-power pyramids in both exporting and importing nations. I discussed this recently in There is No “Free Trade”–There Is Only the Darwinian Game of Trade (March 12, 2018).
Central bank policies don’t just distort domestic economies, they distort global trade, which parallels domestic distributions of winners (a few at the top) and losers (everyone else).
Trade is intertwined with currencies. China has used its currency peg to the USD to avoid being exploited; China has followed a “Goldilocks” strategy that keeps its currency, the yuan/RMB, in a narrow range: not too costly, not too cheap.
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Welcome to Neocolonialism, Exploited Peasants!
Welcome to Neocolonialism, Exploited Peasants!
The U.S. peasantry has been stripmined exactly like the powerless colonial peasantry in the old colonial model.
In my latest interview with Max Keiser, Max asked a question of fundamental importance: (I paraphrase, as the interview has not yet been posted): now that the current iteration of capitalism has occupied every corner of the globe, where can it expand to for its “growth”?
My answer: neocolonialism, my term for the financialized quasi-colonial exploitation of the home domestic population. I described this dynamic in The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012).
We all know how old-fashioned colonialism worked: the imperial power takes political and economic control of previously independent lands.
In the traditional colonial model, there are two primary benefits:
1. The imperial power (the core) extracts valuable commodities and low-cost labor from its colony (the periphery)
2. The imperial power sells its own high-margin manufactured goods to the captured-market of its colony.
This buy low, sell high dynamic is the heart of colonialism, which can be understood as one example of the The Core-Periphery Model (June 11, 2013).
The book Sweetness and Power: The Place of Sugar in Modern History is an excellent history of how this model worked for Great Britain.
The Imperial Core controls finance and credit via its multinational banking sector, and it maintains high profit margins via its state-cartel model of production. The state enforces a cartel-crony-capitalist pricing structure in which competition is strictly limited to street stalls and black markets, and the corporatocracy can raise prices at will: for example, pharmaceutical products such as Epi-Pens can be repriced at will from $60 to $600 each.
If the colonists resist, the resisters are silenced and the media brought under control of the Imperial Deep State. (Sound familar? It should.)
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Greece and the Endgame of the Neocolonial Model of Exploitation
Greece and the Endgame of the Neocolonial Model of Exploitation
With the bankruptcy of Greece now undeniable, we’ve finally reached the endgame of the Neocolonial-Financialization Model.
We all know how old-fashioned colonialism worked: the imperial power takes physical control of previously independent lands and declares its ownership of the region as a newly minted colony.
What’s the benefit of controlling colonies? In the traditional colonial model, there are two primary benefits:
1. The imperial power (the core) extracts valuable commodities and low-cost labor from its colony (the periphery)
2. The imperial power sells its own high-margin manufactured goods to the captured-market of its colony.
This buy low, sell high dynamic is the heart of colonialism, which can be understood as one example of the The Core-Periphery Model (June 11, 2013).
The book Sweetness and Power: The Place of Sugar in Modern History is an excellent history of how this model worked for Great Britain.
The tensions this model generated in the colonial elites of America are brought to life in Tobacco Culture: The Mentality of the Great Tidewater Planters on the Eve of Revolution.
This traditional model of colonialism was forcibly dismantled in the 1940s-1960s. Former colonies established their political independence, a process that diminished the wealth and global reach of former colonial powers.
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