Capitalism's Flaw: a Cycle of Failure then Possible Rebirth

Sadly, capitalism has become a dirty word in some circles, especially amongst young Westerners. I don't blame them. If my best-case prospect was 30,000 USD in debt (credit, car, and student loans) by the age of 24, I'd be against the system, too. 

But capitalism isn't the problem per se--it's the way adults have engineered the economic system with lenient banks. Too many people fail to realize how much the U.S. dollar--or any empire's currency--has been propped up by military force and the slave trade. 

The United States and Mexico, 1821-1848 ((c) 1913, 1969)
by George Lockhart Rives

Most young people do not know that England occupied Havana, Cuba in 1692 in part because of its strategic port; that Guantanamo Bay and Hong Kong are consequences of superpowers legally occupying weaker countries to perpetuate subservient relationships; that a treaty, Utrecht in 1713, specifically gave the British an exclusive license to take captured slaves to the Americas for sale and labor; that in the next phase of empire handover, Spain hastened its decline by supporting the English against France (choose your allies carefully, especially in wartime, when shifting allegiances are common); that the idea of absolute monarchy only crumbled in 1812 thanks to both French and American Revolutions; or that Mexican law (as of July 13, 1824, before America's 1863 Emancipation Proclamation) prohibited the slave trade; that the March 11, 1827 Constitution of Coahuila (Mexico) and Texas expressly declared, "in the [Mexican] state no one is born a slave"; that America invaded Nicaragua in 1912, Haiti in 1915, and the Dominican Republic in 1916 (because the Dominican Republic owed Wall Street money); and so on. 

Averell "Ace" Smith in Commonwealth Club Magazine (2019)

The American conquest of Mexican territory in 1848 is significant in that it created a playbook for Wall Street involvement: 1) create a pretext to invade; 2) take territory from the weaker country; and 3) force the country to go in debt in your currency. 

Published by Colegio de Mexico

This same playbook backfired severely in Germany when dominant powers imposed financial terms and conditions paving the way for demagogues, who always arrive with scapegoats in hand. (Ironically, it was a German philosopher, Immanuel Kant, who created a universal moral law in 1785 that should have assisted future German populations: "Act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means.") In those days, the world learned from its mistakes post-WWII, creating a Marshall Plan that led to defeated Germany and Japan becoming superpowers and stable trade partners. Today, no one believes Iraq--attacked and invaded twice by the United States--will ever become a superpower or more than an oil supplier. 

Domino effect on debt non-repayment usually leads to a crisis.

Whither Western capitalism? Within historical context, it's hard to believe capitalism has ever worked an honest day in its life. To recapture the hearts and minds of young people all over the world, capitalism needs honest, sincere politicians, diplomats, and journalists. Currently, all of the aforementioned are MIA. Until that changes, we might as well prepare the obituary of capitalism--and our young. 

© Matthew Mehdi Rafat

Bonus I: John Swinton, late 1800s: 

I made the acquaintance of Wendell Phillips and found that he, too, had come to similar conclusions. He believed that the capitalist system was steadily undermining the world and bringing his countrymen into a condition quite as wretched as that of the slaves; and he vehemently condemned it.

Bonus II: Wendell Phillips (1861): 

I think the first duty of society is justice. 

The nation which, in moments when great moral questions disturb its peace, consults first for its own safety, is atheist and coward... Slavery has made our churches of Christ to churches of commerce. 

Despotisms are cheap; free governments are a dear luxury--the machinery is complicated and expensive. 

Were safety or security the first objective of human society, this principle, "if unlimited, false... [and] unqualified, it justifies every crime, and would have prevented every glory of history... But grant it. Suppose the Union means wealth, culture, happiness, and safety, man has no right to buy either by crime." 

Look at our history. Under it, 700,000 slaves have increased to 4,000,000. We have paid $800,000,000 directly to the support of slavery. This secession will cost the Union and business $200,000,000 more. This loss which this disturbing force has brought to our trade and industry, within 60 years, it would be safe to call $500,000,000... slavery has been strong enough to rule the nation for sixty years, and now breaks it to pieces because it can rule no longer. 

Bonus III: Alexander Hamilton: "Justice is the end [goal] of government. It is the end [goal] of civil society." 

Cold War II?

The radio is abuzz about VP Biden's so-called "green light" to Israel to attack Iran's nuclear arsenal. Maybe I'm over-analyzing VP Biden's comments, but I think the White House is trying to take pressure off Iran's protesters. In other words, this might be a classic diversion tactic.

Iran's current regime is in a tough spot. It lacks the manpower to pre-emptively attack another country, especially when so many of its military members have to handle protesters and internal dissent. Even setting aside international law, an Iranian attack against Israel would be a suicide mission because of Israel's nuclear arsenal. Attacking Saudi Arabia, an American ally, or American troops stationed in neighboring countries would also be a suicide mission for obvious reasons.

Israel, on the other hand, is also in a tough spot. Although it has the advantage in terms of weaponry, it must still weigh the overall benefits versus the costs of attacking Iran. At this time, the costs of an Iranian attack are undefined and possibly unmanageable because of Iran's influence in Iraq and Afghanistan, not to mention Iran's long range ballistic missiles. In addition, Iran doesn't lack the ability to defend itself. Iran has wartime experience because of the 1980-1988 Iran-Iraq war and has formidable support in Hezbollah, which has recent experience fighting against Israeli troops.

As for VP Biden, he seems to be playing the role of bad cop to President Obama's good cop. That's not necessarily a bad strategy, because even if VP Biden goes overboard, his words aren't binding--after all, he's not the President. In any case, President Obama is also in a tough spot. He knows his options are limited. Most Americans do not want to sacrifice more American troops in another non-defensive war. As a result, it looks like a stalemate and another Cold War until the fall of the current Iranian regime and a Middle Eastern glasnost.

Update on July 7, 2009: I just saw CNN's ticker--President Obama said there is no "green light" for Israel to attack Iranian nuclear sites.

All this attention on Iranian nuclear capabilities ignores the possibility that the current Iranian regime might be out in the next three years. Meanwhile, North Korea already has nuclear weapons and has threatened American interests. If I lived in Hawaii, I'd be more than a little concerned to be within shooting distance of North Korea. I am concerned President Obama hasn't provided a plan for containing the North Korean threat. As of today, North Korea, not Iran, represents the greatest threat to the United States.

As for Israel, it should focus on peace with Lebanon. Hamas and Hezbollah are greater threats to Israel than Iran. A prosperous, friendly Lebanon will cause Hezbollah and Hamas to wind down operations the same way the Provisional Irish Republican Army (IRA) gave up power to Sinn Féin once Ireland became prosperous. The 2006 Israeli-Lebanon war showed that force won't work in Lebanon. If Israel wants peace, having Lebanon as a peaceful partner is key. An Israeli-Lebanese partnership should be a higher priority for Israel than a possible Iranian threat three years from now.

But then again, what do I know? I've never visited North Korea, Lebanon, or Israel. Still, I hope one day to see all three countries experience lasting peace.

Bonus: Alan Dershowitz on Israel in the WSJ (7/3/09):

http://online.wsj.com/article/SB124649366875483207.html

A majority of American-Jewish supporters of Israel, as well as Israelis, do not favor settlement expansion. Thus the Obama position on settlement expansion, whether one agrees with it or not, is not at all inconsistent with support for Israel...

I believe there is a logical compromise on settlement growth that has been proposed by Yousef Munayyer, a leader of the American-Arab Anti-Discrimination League. "Obama should make it clear to the Israelis that settlers should feel free to grow their families as long as their settlements grow vertically, and not horizontally," he wrote last month in the Boston Globe. In other words, build "up" rather than "out." This seems fair to both sides...