Reversal of Capital Flows, Yochanan Simon (from this site)
Ben Bernanke and much of the Fed worked feverishly over the weekend to help arrange an emergency loan and deal finalized tonight to allow JP Morgan to purchase the once-mighty Bear Stearns for two dollars a share; Bear was on the verge of complete collapse.
Add to this the seemingly unrelated reports about the skyrocketing price of wheat. Crop failures around the world combined with a rising demand for wheat in newly emerging super-economies have driven the price up; exports of American wheat are way up: the dollar is low, and American wheat seems cheap to other nations. This situation -- our nation's harvest being snatched up by foreigners as prices rise here -- brought to my mind the scenario depicted in the excellent Darwin's Nightmare, in which the fish of Lake Victoria are caught and processed by the Tanzanians, but nearly all of that fish is flown out of the country to Europe and Japan; the foreign demand renders the fish too expensive for the Tanzanian locals.
These latest and deeply ominous developments in the American economy brought to mind this passage from Slavoj Zizek:
How, then, does the universe of Capital relate to the form of Nation-State in our era of global capitalism? Perhaps this relationship is best designated as "auto-colonization": with the direct multifunctioning of Capital, we are no longer dealing with the standard opposition between metropolis and colonized countries; a global company, as it were, cuts its umbilical cord with its mother-nation and treats its country of origin as simply another territory to be colonized . . . . [T]he new multinationals have exactly the same attitude towards the French or American local population as they do towards the population of Mexico, Brazil or Taiwan. Is there not a kind of poetic justice in this self-referential turn? Today's global capitalism is thus again a kind of "negation of negation", after national capitalism and its internationalist/colonialist phase. At the beginning (ideally, of course), there is capitalism within the confines of a Nation-State, with the accompanying international trade . . . .; what follows is the relationship of colonization in which the colonizing country subordinates and exploits . . . the colonized country; the final moment of this process is the paradox of colonization in which there are only colonies, no colonizing countries -- the colonizing power is no longer a Nation-State but directly the global company. In the long term, we shall all not only wear Banana Republic shirts, but also live in banana republics."Multiculturalism", New Left Review 225, 1997, pp. 28-51 (emphasis added).
It is becoming more and more apparent that we are watching the descent of the United States from global hegemon into just another of Zizek's colonies. (See also Toyota plants in Kentucky, Indian-Americans children of immigrants to America returning to India, where better work is available, etc.) In Zizek's framework, J.P. Morgan is the global company, the very embodiment of global Capital detached from any mother-country; in the dramatic events this weekend, global Capital exercised its power over (one of) its temporary host colonies, to extract further resources -- all of this to strengthen and serve global Capital. What will this $30 billion loan get the host (i.e., the United States)? Who's to say? Although, it is worth noting that global Capital has few if any roots, and can always tell which way the wind is blowing.