Political Report #1436
Beyond the Economic Chaos of Coronavirus Is a Global War Economy
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What does a virus have to do with war and repression? The coronavirus has disrupted global supply networks and spread panic throughout the world’s stock markets. The pandemic will pass, not without a heavy toll. But in the larger picture, the fallout from the virus exposes the fragility of a global economy that never fully recovered from the 2008 financial collapse and has been teetering on the brink of renewed crisis for years.
The crisis of global capitalism is as much structural as it is political. Politically, the system faces a crisis of capitalist hegemony and state legitimacy. As is now well-known, the level of global social polarization and inequality is unprecedented. In 2018, the richest 1 percent of humanity controlled more than half of the world’s wealth while the bottom 80 percent had to make do with just 4.5 percent of this wealth. Such stark global inequalities are politically explosive, and to the extent that the system is simply unable to reverse them, it turns to ever more violent forms of containment to manage immiserated populations.
Structurally, the system faces a crisis of what is known as overaccumulation. As inequalities escalate, the system churns out more and more wealth that the mass of working people cannot actually consume. As a result, the global market cannot absorb the output of the global economy. Overaccumulation refers to a situation in which enormous amounts of capital (profits) are accumulated, yet this capital cannot be reinvested profitably and becomes stagnant.
Indeed, corporations enjoyed record profits during the 2010s at the same time that corporate investment declined. Worldwide corporate cash reserves topped $12 trillion in 2017, more than the foreign exchange reserves of the world’s central governments, yet transnational corporations cannot find enough opportunities to profitably reinvest their profits. As this uninvested capital accumulates, enormous pressures build up to find outlets for unloading the surplus. By the 21st century, the transnational capitalist class turned to several mechanisms in order to sustain global accumulation in the face of overaccumulation, above all, financial speculation in the global casino, along with the plunder of public finances, debt-driven growth and state-organized militarized accumulation.
Militarized Accumulation
It is the last of these mechanisms, what I have termed militarized accumulation, that I want to focus on here. The crisis is pushing us toward a veritable global police state. The global economy is becoming ever more dependent on the development and deployment of systems of warfare, social control and repression, apart from political considerations, simply as a means of making profit and continuing to accumulate capital in the face of stagnation. The so-called wars on drugs and terrorism; the undeclared wars on immigrants, refugees, gangs, and poor, dark-skinned and working-class youth more generally; the construction of border walls, immigrant jails, prison-industrial complexes, systems of mass surveillance, and the spread of private security guard and mercenary companies, have all become major sources of profit-making.
The events of September 11, 2001, marked the start of an era of a permanent global war in which logistics, warfare, intelligence, repression, surveillance, and even military personnel are more and more the privatized domain of transnational capital. Criminalization of surplus humanity activates state-sanctioned repression that opens up new profit-making opportunities for the transnational capitalist class. Permanent war involves endless cycles of destruction and reconstruction, each phase in the cycle fueling new rounds and accumulation, and also results in the ongoing enclosure of resources that become available to the capitalist class.
The Pentagon budget increased 91 percent in real terms between 1998 and 2011, while worldwide, total defense outlays grew by 50 percent from 2006 to 2015, from $1.4 trillion to $2.03 trillion, although this figure does not take into account secret budgets, contingency operations and “homeland security” spending. The global market in homeland security reached $431 billion in 2018 and was expected to climb to $606 billion by 2024. In the decade from 2001 to 2011, military industry profits nearly quadrupled. In total, the United States spent a mind-boggling nearly $6 trillion from 2001 to 2018 on its Middle East wars alone.
Led by the United States as the predominant world power, military expansion in different countries has taken place through parallel (and often conflictive) processes, yet all show the same relationship between state militarization and global capital accumulation. In 2015, for instance, the Chinese government announced that it was setting out to develop its own military-industrial complex modeled after the United States, in which private capital would assume the leading role. Worldwide, official state military outlays in 2015 represented about 3 percent of the gross world product of $75 trillion (this does not include state military spending not made public).
But militarized accumulation involves vastly more than activities generated by state military budgets. There are immense sums involved in state spending and private corporate accumulation through militarization and other forms of generating profit through repressive social control that do not involve militarization per se, such as structural controls over the poor through debt collection enforcement mechanisms or accumulation opportunities opened up by criminalization.
The Privatization of War and Repression
The various wars, conflicts, and campaigns of social control and repression around the world involve the fusion of private accumulation with state militarization. In this relationship, the state facilitates the expansion of opportunities for private capital to accumulate through militarization. The most obvious way that the state opens up these opportunities is to facilitate global weapons sales by military-industrial-security firms, the amounts of which have reached unprecedented levels. Between 2003 and 2010 alone, the Global South bought nearly half a trillion dollars in weapons from global arms dealers. Global weapons sales by the top 100 weapons manufacturers and military service companies increased by 38 percent between 2002 and 2016.
The U.S.-led wars in Iraq and Afghanistan precipitated the explosion in private military and security contractors around the world deployed to protect the transnational capitalist class. Private military contractors in Iraq and Afghanistan during the height of those wars exceeded the number of U.S. combat troops in both countries, and outnumbered U.S. troops in Afghanistan by a three-to-one margin. Beyond the United States, private military and security firms have proliferated worldwide and their deployment is not limited to the major conflict zones in the Middle East, South Asia and Africa. In his study, Corporate Warriors, P.W. Singer documents how privatized military forces (PMFs) have come to play an ever more central role in military conflicts and wars. “A new global industry has emerged,” he noted. “It is outsourcing and privatization of a twenty-first century variety, and it changes many of the old rules of international politics and warfare. It has become global in both its scope and activity.” Beyond the many based in the United States, PMFs come from numerous countries around the world, including Russia, South Africa, Colombia, Mexico, India, the EU countries and Israel, among others.
Beyond wars, PMFs open up access to economic resources and corporate investment opportunities — deployed, for instance, to mining areas and oil fields — leading Singer to term PMFs “investment enablers.” PMF clients include states, corporations, landowners, nongovernmental organizations, even the Colombian and Mexican drug cartels. From 2005 to 2010, the Pentagon contracted some 150 firms from around the world for support and security operations in Iraq alone. By 2018, private military companies employed some 15 million people around the world, deploying forces to guard corporate property; provide personal security for corporate executives and their families; collect data; conduct police, paramilitary, counterinsurgency and surveillance operations; carry out mass crowd control and repression of protesters; manage prisons; run private detention and interrogation facilities; and participate in outright warfare.
Meanwhile, the private security (policing) business is one of the fastest growing economic sectors in many countries and has come to overshadow public security around the world. According to Singer, the amount spent on private security in 2003, the year of the invasion of Iraq, was 73 percent higher than that spent in the public sphere, and three times as many persons were employed in private forces as in official law enforcement agencies. In parts of Asia, the private security industry grew at 20 percent to 30 percent per year. Perhaps the biggest explosion of private security was the near complete breakdown of public agencies in post-Soviet Russia, with over 10,000 new security firms opening since 1989. There were an outstanding 20 million private security workers worldwide in 2017, and the industry was expected to be worth over $240 billion by 2020. In half of the world’s countries, private security agents outnumber police officers.
As all of global society becomes a highly surveilled and controlled and wildly profitable battlespace, we must not forget that the technologies of the global police state are driven as much, or more, by the campaign to open up new outlets for accumulation as they are by strategic or political considerations. The rise of the digital economy and the blurring of the boundaries between military and civilian sectors fuse several fractions of capital — especially finance, military-industrial and tech companies — around a combined process of financial speculation and militarized accumulation. The market for new social control systems made possible by digital technology runs into the hundreds of billions. The global biometrics market, for instance, was expected to jump from its $15 billion value in 2015 to $35 billion by 2020.
As the tech industry emerged in the 1990s, it was from its inception tied to the military-industrial-security complex and the global police state. Over the years, for instance, Google has supplied mapping technology used by the U.S. Army in Iraq, hosted data for the Central Intelligence Agency, indexed the National Security Agency’s vast intelligence databases, built military robots, co-launched a spy satellite with the Pentagon, and leased its cloud computing platform to help police departments predict crime. Amazon, Facebook, Microsoft and the other tech giants are thoroughly intertwined with the military-industrial and security complex.
Criminalization and the War on Immigrants and Refugees
Criminalization of the poor, racially oppressed, immigrants, refugees and other vulnerable communities is the most clear-cut method of accumulation by repression. This type of criminalization activates “legitimate” state repression to enforce the accumulation of capital, whereby the state turns to private capital to carry out repression against those criminalized.
There has been a rapid increase in imprisonment in countries around the world, led by the United States, which has been exporting its own system of mass incarceration. In 2019, it was involved in the prison systems of at least 33 different countries, while the global prison population grew by 24 percent from 2000 to 2018. This carceral state opens up enormous opportunities at multiple levels for militarized accumulation. Worldwide, there were in the early 21st century some 200 privately operated prisons on all continents and many more “public-private partnerships” that involved privatized prison services and other forms of for-profit custodial services such as privatized electronic monitoring programs. The countries that were developing private prisons ranged from most member states of the European Union, to Israel, Russia, Thailand, Hong Kong, South Africa, New Zealand, Ecuador, Australia, Costa Rica, Chile, Peru, Brazil and Canada.
Those criminalized include millions of migrants and refugees around the world. Repressive state controls over the migrant and refugee population and criminalization of non-citizen workers makes this sector of the global working class vulnerable to super-exploitation and hyper-surveillance. In turn, this self-same repression in and of itself becomes an ever more important source of accumulation for transnational capital. Every phase in the war on migrants and refugees has become a wellspring of profit making, from private, for-profit migrant jails and the provision of services inside them such as health care, food, phone systems, to other ancillary activities of the deportation regime, such as government contracting of private charter flights to ferry deportees back home, and the equipping of armies of border agents.
Undocumented immigrants constitute the fastest-growing sector of the U.S. prison population and are detained in private migrant jails and deported by private companies contracted out by the U.S. state. As of 2010, there were 270 immigration jails in the U.S. that caged on any given day over 30,000 immigrants and annually locked up some 400,000 individuals, compared to just a few dozen people in immigrant detention each day prior to the 1980s. From 2010 to 2018, federal spending on these detentions jumped from $1.8 billion to $3.1 billion. Given that such for-profit prison companies as CoreCivic and GEO Group are traded on the Wall Street stock exchange, investors from anywhere around the world may buy and sell their stock, and in this way, develop a stake in immigrant repression quite removed from, if not entirely independent, of the more pointed political and ideological objectives of this repression.
In the United States, the border security industry was set to double in value from $305 billion in 2011 to some $740 billion in 2023. Mexican researcher Juan Manuel Sandoval traces how the U.S.-Mexico border region has been reconfigured into a “global space for the expansion of transnational capital.” This “global space” is centered on the U.S. side around high-tech military and aerospace related industries, military bases, and the deploying of other civilian and military forces for combating “immigration, drug trafficking, and terrorism through a strategy of low-intensity warfare.” On the Mexican side, it involves the expansion of maquiladoras (sweatshops), mining and industry in the framework of capitalist globalization and North American integration.
The tech sector in the United States has become heavily involved in the war on immigrants as Silicon Valley plays an increasingly central role in the expansion and acceleration of arrests, detentions and deportations. As their profits rise from participation in this war, leading tech companies have in turn pushed for an expansion of incarceration and deportation of immigrants, and lobbied the state to use their innovative social control and surveillance technologies in anti-immigrant campaigns.
In Europe, the refugee crisis and EU’s program to “secure borders” has provided a bonanza to military and security companies providing equipment to border military forces, surveillance systems and information technology infrastructure. The budget for the EU public-private border security agency, Frontex, increased a whopping 3,688 percent between 2005 and 2016, while the European border security market was expected to nearly double, from some $18 billion in 2015 to approximately $34 billion in 2022.
The Coronavirus Is Not to Blame
As stock markets around the world began to plummet starting in late February, mainstream commentators blamed the coronavirus for the mounting crisis. But the virus was only the spark that ignited the financial implosion. The plunge in stock markets suggests that for some time to come, financial speculation will be less able to serve as an outlet for over-accumulated capital. When the pandemic comes to an end, we will be left with a global economy even more dependent on militarized accumulation than before the virus hit.
We must remember that accumulation by war, social control and repression is driven by a dual logic of providing outlets for over-accumulated capital in the face of stagnation, and of social control and repression as capitalist hegemony breaks down. The more the global economy comes to depend on militarization and conflict, the greater the drive to war and the higher the stakes for humanity. There is a built-in war drive to the current course of capitalist globalization. Historically, wars have pulled the capitalist system out of crisis while they have also served to deflect attention from political tensions and problems of legitimacy. Whether or not a global police state driven by the twin imperatives of social control and militarized accumulation becomes entrenched is contingent on the outcome of the struggles raging around the world among social and class forces and their competing political projects.
Original article can be found (here). URL: https://truthout.org/articles/beyond-the-economic-chaos-of-coronavirus-is-a-global-war-economy/ |
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