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The Precarious Future of the Nation-State (3)

(Parts 1 and 2, here and here)

The destruction caused by the Second World


War, particularly in Germany and the USSR,
forced a great effort to rebuild and reconstruct
the economies, which led to a sister approach
by both blocks of a very deep intervention of
public expenditure, within the framework of
what came to be called Keynesian policies, in
order to increase the GDP.

Everything seemed to be going well, workers


were thinking more about consumption than
about revolution, unemployment was marginal,
and the USA was the great godfather of the
Bretton Woods system and a great beneficiary
of decolonization that had reset the former
colonizing powers into a regional framework.

Until ... the model imploded for internal and


external reasons, as will be seen in the
following text.

C – Capitalism’s Thirty Glorious Years

13 – The reformulation of the political thinking and the Keynesian splendour

14 – The reconstruction of infrastructures and the beginning of European integration

15 – Supra-national institutions shape globalization

16 – The decolonization and decline of colonizing nations

17 – Workers acceptance of the capitalist order

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C – Capitalism’s Thirty Glorious Years

All business cycles have an ascending phase, which manifests itself in terms of
wealth creation, more employment and optimism, and lasts while a set of new
technologies, other business models, and other political costumes develop. This
period is succeeded by another in which the exhaustion of the combination of those
factors, until then creators of optimism, as well as its beneficial effects, occurs.
During this period of decline other technological, financial, and political factors are
emerging or will be established, which will tend to establish a new paradigm of capital
accumulation through another combination, which will relaunch the economy into a
new upward phase.

This is how Kondratiev's waves were built, even beyond his death, and which we
have been using to characterize capitalism since it was established as the dominant
economic structure on the planet. It should not be inferred from the above that
capitalism is the final destination of Humanity; like any other production mode, it has
a duration that goes far beyond the time of a generation, to the great and just
impatience of those who, feeling its harmful effects, are not satisfied with their
conjuncture or superficial modifications, even when favourable to crowd. For
example, the overwhelming majority of a population will not disdain a wage increase;
but only an idiot will conclude that it signals a structural change for capitalism.

It is a fact that the traditional, historical, critically-minded theses of capitalism have


belittled its evident capabilities for exploiting opportunities and adapting to
technological innovations, its ability in social, political and business management, of
expansion into a global market, of credit creation and monetary stability. They also
underestimated the fact that the levels of capital accumulation have allowed the
allocation of financial and technological resources to the creation and maintenance of
repressive means of bodies and minds; in a first plane, through a consumerism made
playful and compulsive and, in a second plane, through a silent genocide of peoples
and social strata, or the ancestral method of war. As Zygmunt Bauman says, "the
Holocaust was born and executed in our modern rational society, at a high stage of
our civilization, on top of the human cultural level and, therefore, it is a problem of our
society, our civilization, and our culture" 1; as is exemplified by the imprisonment of
the Palestinian people by the Israeli entity, shamelessly accepted by the
"international community".

1
"Modernity and the Holocaust", quote in Collapse, by Carlos Taibo

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Shortly before World War I, the divisions between the powers and the force of the
workers' movements allowed for a near collapse of capitalism, a conception that was
accentuated with the Russian Revolution of 1917. This global collapse did not
happen but the dominant theory kept predicting a short-term collapse, the fruit of an
unstoppable crisis of capitalism.

Evgeny Varga, a prominent figure in power in the USSR, realized capitalism's


adaptability in 1946, but was forced to acknowledge that capitalist economies would
only come to know collapse; Varga might have, a few years earlier, masterminded
Kondratiev's execution because he had concluded – and rightly so – that
scholasticism was a mere ideological construction when reality denied it. Reality
would be... wrong; Stalin and the Western Trotskyists agreed on the eminent
overthrow of capitalism in the west as a consequence of an impending stagnation
that, in the end, would only arise much later, in the 1970s, and which then brought
the implantation of the neoliberal paradigm and not the revolution or even a placebo
called "socialism".

The second post-war is the beginning of the ascending phase of the fourth
Kondratiev wave that will reach the inflection point in the early 1970s. It is a period of
great innovations such as transistors, automatic calculus, synthetic materials,
television, the pill, mass consumption, automation, space exploration, nuclear
energy, and a new arms race. It is a period of growth of the state apparatuses, of the
extension of their actions, and also the creation of groups of nation-states with
various degrees of articulation and integration.

In what follows, we will address a number of structuring elements of a geopolitical


and social scope that mark the political and economic scene of the post-war period.

13 – The reformulation of political thought and Keynesian splendor

The Soviet army's compressive roller over the Nazis, in the final phase of the war,
boosted the peoples’ support for the socialist and communist parties of the time and,
for several years, even attracted the intelligentsia; this despite the destruction of
fascism having stopped north of the Pyrenees, sparing the regimes of Franco and
Salazar.

That popular dynamic of sympathy towards the Soviet model began to decline as
Stalin's repressive practices started to become known. Nevertheless, the socialist
parties themselves were forced to present advanced social ideas in a progressive
dynamic that forced the conservatives to adapt to the new times. The English Labour,
that came to power isolated in 1945, created a national health service and a state of
universal and lifelong social welfare, in addition to having begun decolonization; in
most cases, with the agreement of the conservatives, traditionally little inclined to big

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state involvement, and still convinced of the country's great power... promoted
nuclear weapons.

Unlike the English pragmatists, France showed, with the colonial wars in Indochina
and Algeria, difficulties in adapting to the new times. Despite the right’s
predominance in power, a social security was instituted2 the right to vote was
extended to women, while large banks, insurance companies, electrical companies,
and the iron and coal industries were nationalized, without the acquisition of the
atomic bomb being forgotten.

In Western Europe the times of applying the Keynesian policies are lived with
strong public investment, large government intervention and increased consumption.
In Eastern Europe, the procedures were identical, with a much higher state
intervention in the decision and in the execution, a reduced role of the private
initiative and a great care for investment, to the detriment of consumption.

14 – The reconstruction of infrastructures and the beginning of European integration

The USA, with its economic and military powers not only intact but even strengthened
after the end of the war, vis-a-vis a fragile Western Europe, financed part of the
latter’s reconstruction through the Marshall Plan and the investment of American
companies. These have seen in Europe an opportunity for achieving large capital
gains with the rebuilding of infrastructures and the reactivation of trade and capital
circuits; and from then on they were also aimed at stamping out or reducing interest
in the Soviet model.

On the other hand, the memory of the bank crash of 1929 being fresh, strong control
was implemented over the capacity of the banking system to grant credit, with the
obligatory bank reserves corresponding to 20-25% of the total credit granted; by
comparison, it should be noted that the ECB currently only requires 1% of cash
reserves, since money is generally a product of computer records in credit
operations, it does not leave the banking system, excluding, with comparatively small
values, banknotes and coins. This fact justifies an important part of the current power
of the financial system, of its domination over national economies, enterprises,
families and states, through debt, delegating to the political classes the transfer of the
effects of the insanity of capitalism and the financial system to the population.

2
In this theme, in France, Ambroise Croizat’s role should be highlighted. He included all the social risks of workers in a single institution,
the creation of a social security system covering both actively working and inactive people, with business financing, from birth to death and
with the management entrusted to the beneficiaries themselves. One of the most socially advanced aspects was the award of a salary
equivalent to 225 h, monthly, to a mother who stayed home to care for two children, a recognition of an effective job, disconnected from
the orbit of capital (conf "End Defensive Struggles" by Bernard Friot (Le Monde Diplomatique, nov / 2017)

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Returning to the post-war period, real interest rates were then low or even negative,
facilitating debtors, especially the states, who found ways to finance themselves
without burdening societies with high tax loads, while, at the same time, allowing the
erosion of public debt. The same does not happen today: states get indebted in
parallel with very high taxation, in a context of low inflation.

Subsequently to the Marshall Plan, the Comecon (January 1949) was created in the
East between the USSR and the countries that had adopted its one-party, state-
based model, a disconnected set from the Western capitalist market system; and in
acerbic strategic competition with the latter.

This competition, in a context of the Cold War and large political cleavages on the
left-right axis, would be the starting point for the creation of a sequence of acts of
economic and political integration in Western Europe. We refer to the Council of
Europe (May 1949), the Schuman Declaration (May 1950) and, in a more structured
way, the creation of the European Coal and Steel Community (ECSC) (1951) and of
the European Economic Community (1957); in the latter case preceding a long series
of decisions and treaties, always in the forge, aiming at the creation of a super-state
(the European Union) which is now growing in size, depth, and totalitarianism; and
whose institutions are perfectly in line with the national oligarchies, which compete for
reactionary penchant. After the danger of confrontation and competition with an
adversary in the East was waived in 1991, the EU has accentuated its economist and
oligarchic tendencies, favouring multinationals and the financial system, while
accompanying the USA in war adventures in the Mediterranean area.

De Gaulle's strong nationalist sentiment put Britain – perceived as being under strong
USA influence – out of the process of European integration, withdrew the French
troops from the NATO chain of command and advanced to a nuclear arsenal. In the
same vein, de Gaulle sought a suzerainty of France in Western European space,
benefiting from the then weakness of West Germany; later this suzerainty evolved
into a parity (the Franco-German axis) which became German supremacy, with the
strength of its economy and the reunification.

Also at the military level, antagonistic coalitions that separated Europe into two parts,
with a few neutral countries in between, were structured at the time. NATO 3 (1949) is
seen as an expression of the American suzerainty, lasting until today, of defence
against a propagandized Soviet threat and, nowadays, Russian; is part of the military
oversight that the USA believe in extending to all quarters of the planet, with the
assumed right to bomb, invade, block, manipulate and fund regimes, military groups

3
The overthrow of the Berlin Wall and the dismemberment of the Eastern bloc and the USSR led to the disappearance of the Warsaw Pact
but not of NATO’s. The USA needs to keep a foot in Europe, as monitor, waving a Russian threat to guarantee the sale of arms; and, in
practice, directly through NATO or other militaristic acronyms where it participates, it has intervened in geographic areas that do not
involve, nor even confine with, member countries, or from where no threats to those countries emanate.

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or merely terrorists. Within the context of the Cold War, in response to the creation of
NATO, the Warsaw Pact emerged in 1955, but was meanwhile extinguished in the
wake of the collapse of the Eastern Bloc. In the military camp, as in many others,
between the two opposing blocs of regimes of the Cold War, mimicry prevailed; even
in the oligarchic way in which populations were (and are) estranged from decisions
about their lives.

15 – Supra-national institutions shape globalization

Bretton Woods was the setting where the new global monetary and financial order
was established in 1944, with total domination by the USA and the dollar. The IMF
was created at that time to support countries with problems of external deficit,
economic growth, with the objective of increasing employment and reducing poverty
(!) After the end of the dollar convertibility to gold (1971) and the decline of
Keynesianism, it adopted neoliberal precepts by imposing draconian measures on
countries with difficulties, which invariably result in population austerity programs and
privatizations, in return for the granted financing at high rates. In Portugal, IMF
intervention took place in 1977, 1983/85 and recently (2011/14) under the structural
readjustment program, the IMF being in partnership with the ECB and the European
Commission. Another institution resulting from Bretton Woods was the World Bank,
which vocation is to finance development support projects.

Also in Bretton Woods, a stable model of the relationship between national


currencies was drawn, by setting the dollar parity at $ 35 per ounce of gold, the
American currency serving as the reference currency, thus avoiding fluctuations with
harmful impacts on the international trade; this central role of the dollar did not raise
any great challenges at a time when the US held 80 percent of the world's gold
reserves, a productive capacity not destroyed by war, and enormous supremacy in
global trade. The system worked while the American economy also had great
dominance in international economic relations; when the dollar began to decline, in
parallel with an intense demand for gold or other currencies such as the German
mark or Japanese yen, both countries with strong trade surpluses, the USA ended
the convertibility in 1971.

In 1947, the General Agreement on Tariffs and Trade (GATT) was created with the
aim of liberalizing world trade, restricted before the war and, then, under strong
protectionism within each of the colonial empires, as well as between nation states, in
general. It was understood that free trade, free of barriers, was a source of economic
efficiency which fed democracy and social welfare; and following the same logic, in
addition to trade in goods, services, investments and patents were included in a
process that gradually allowed the domination by multinationals and the expansion of
their presence throughout the world, a process that culminated in 1995 with the

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creation of WTO - World Trade Organization, where the vast majority of countries are
present, being dominant amongst the absentees a large number of Arab or Muslim
countries, which reserve their position as observers.

It is also worth mentioning several of the many institutions of a global or regional


character which federate or replace the member states thus revealing an ever
increasing number and scope of problems that cannot or should not be confined to
the autarchic logic of the nation-state and their domestic oligarchies. Among the
global ones, one may refer to UNESCO (United Nations Educational, Scientific and
Cultural Organization), the WHO (World Health Organization), the OECD
(Organization for Economic Co-operation and Development), the ITO (International
Trade Organization), the FAO (Food and Agriculture Organization), the IAEA
(International Atomic Energy Agency), the UNCTAD (United Nations Conference on
Trade and Development) ...

However, assaults on the environment and climate change, although little discussed
during the 30 glorious years of the growth of the famous GDP, are now of
inescapable importance and are late in getting global management bodies,
everything being dependent on episodic and temporary conferences at the end of
which the major nation-states responsible for the existing problems act as they see
fit, without being subject to sanctions or boycotts, as is always the case when
geopolitical divisions or the commercial interests of the great powers are at stake.

International institutions of a regional nature are many, and it is essential to refer to


the European Union as a unique case of deepening political and economic
integration, with multiple decision-making bodies that stand above the member
states. We also refer to NAFTA and Mercosur, in the Americas, ASEAN, APEC and
the Arab League, in Asia, or SADC and ECOWAS in Africa. Global-scope, non-state
institutions for specific themes, such as the Red Cross or Amnesty International,
should also be mentioned.

In political terms, the UN was created in 1945 as a forum for dialogue and
consultation between the nations... represented by the national political classes and,
in addition, with the creation of a directory with veto power, consisting of the USA,
USSR, France, UK, and China (the Taipei regime) and which continues to this day,
with the People's Republic of China replacing the island of Taiwan, and Russia
inheriting the place of the extinct USSR, all of them nuclear powers.

16 – The decolonization and the decline of colonizing nations

In addition to the latent conflict at the borders of the two blocs that divided Europe, a
further threat came from the incipient decolonization and that would render the

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European countries, as whole, regional powers under the protective shadow of the
USA, for some, and of the USSR, for others, with very few neutral ones.

Neutralities relative to the East-West antagonism would grow, especially in the new
nation-states erected in the former colonies, which for some time after the Bandung
Conference had a role of some relevance under the impulse of Nehru, Tito, and Chu-
En-Lai. But for many of the new countries, especially in Africa, one thing was the
political independence, the creation of an anthem and a flag, and another, much
more complex, was to create economic coherence and autonomy having as a
material substrate structures aimed at supplying the Western countries with raw
materials, minerals, and plantation’s agricultural products, in a situation of market and
prices’ dependency; and to do all of this in parallel with the traditional way of
populations living of a traditional subsistence agriculture, ignored by the former
colonizer and despised by the new elites.

These situations led to repeated coups d'état with the support of groups of the
military, or by the military hierarchies themselves, which directly assumed the
predation in collusion with the multinationals or interests anchored in the old
European metropoles, so that colonial exploitation could continue, after
independence, under another flag; and there are even cases of mercenary
intervention. In other situations, corrupt leaders – Mobutu, Houphouet-Boigny, Idi
Amin, Mugabe, Bokassa, Nguema, J. E. dos Santos ... – set up repressive and
predatory, personalized regimes. In the few cases where groups with commendable
intentions came to power, they had to face the lack of capital and technology, and
also the manoeuvres of multinationals who exploited ethnic or tribal divergences,
leading to their overthrow. The continuity of the colonial borders in their complete
artificiality, the existence of tribal structures separated by these borders, undermined
possible solidarities and, on the contrary, imposed conflicts and wars, the most
serious of them in Rwanda.

In other cases, colonial shares had divided territories with old state structures,
redesigning them or imposing new entities, generating or exacerbating ethnic and
religious antagonisms, as occurred after the dismantling of the Ottoman Empire, with
the invention of new entities such as Lebanon, Jordan or the Zionist entity; in this
case, in the form of territorial occupation by strangers to the region, expelling their
ancestral inhabitants. The same has been observed in the separation of Hindus and
Muslims in India, which generates an artificial Pakistan as a pretence unifier of
Bengalis, Pashtuns, Baluch and others, based on religious belief. More recently, the
Sudanese drama has first emerged, continued for the South Sudanese, at the
present time. In the Persian Gulf, Westerners have supported the "democracy" run by
medieval kings and dignitaries who guarantee the policing of oil wells at the cost of
the absence of any civic liberties. Finally, after the collapse in Dien Bien Phu of
French domination in Vietnam, it was the USA that attempted to put the Vietnamese

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on the axis of neo-colonialism... by sprinkling them with napalm and with Agent
Orange.

Two political and humanitarian cancers survived during the period under
consideration, under degenerate forms of nation-states; the South African apartheid
that was to last until 1994 and the Israeli genocidal dementia, with a religious facade,
that still lasts. In the first case, most of the non-white population was confined to
Bantustans, serving as labour reserves, affectionately called homelands; or sent to
the suburbs, to the townships where workers without any rights or decent habitation
conditions were piled up, and to whom the regime magnanimously granted daily
access to the masters’ areas, gastarbeiters in their own land. It was a system whose
social structure and the capture of labour was studied and methodically set up, based
on a racist and laic scientism.

In the Zionist entity, due to the smallness of the territory, there is an increased and
constant occupation of the space that continues, however, to be shared, in
overlapping layers or cells that are intended to be watertight. The lords’ one, richer,
and another in continuous reconfiguration, with military controls in every corner,
made up of the ancestral inhabitants, plundered, humiliated, segregated, under the
passive annoyance of the "international community", no matter how ethereal this
concept may be. The ideology of this racist regime does not include so much the
expulsion of the Palestinians as their submission as precarious suppliers of cheap
labour; a sacred state design that fills religious fanatics and is a vain hope,
threatened by the unfavourable demography4. The continuity of the Zionist entity will
be assured while in the USA,5 and to the West in general, there is a need for oil land
control barracks; only in this way can it be understood that Zionists are allowed the
possession of atomic weapons and Jericho missiles, with a range of 11500 km
(which can reach... Rio de Janeiro...).

More broadly, the proliferation of closed, well-equipped, protected and guarded


condominiums (in today's South Africa, as in the rich circles of other countries), is
part of the social segmentation logic in which the rest of the population lives in
townships, be them the suburbs of European cities or most of the huge African
conurbations (Lagos, Nairobi...).

4
In Portugal, the small and isolated Jewish community of Belmonte has been subject to harassment amongst the young people so they go
live in the territories occupied by the Zionists. In order to please the Zionists and ... attract foreign investment, in the Portuguese parochial
government circles there is an intention to grant Portuguese passports to Sephardim of Lusitanian origin but that emigrated to Great
Britain when they were expelled some 500 years ago; while the same is not extended to the descendants of the Moors expelled on the
same occasion ... Within the imbecility that is the apanage of the Portuguese political class, it is expected that on June 10, the day of the
"race" - posthumous passports are bestowed to David Ricardo and Benedito Spinoza, who had ancestors close to members of Jewish
communities of Portuguese origin.
5
The position of the great powers has been common in sustaining Zionism on Palestinian lands. Great Britain favoured the installation of
the first flocks of Jews in Palestine at the end of World War II; France provided nuclear technology; the USA is the major financier of private
capital and armaments; and the USSR in the 1980s sent hundreds of thousands of Soviet Jews to reinforce the settlement of the Zionist
entity.

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17 – Workers acceptance of the capitalist order

Technical innovations, post-war reconstruction, popularization of mass production,


increased employment, the influx of countryside people to the cities, the emigration of
Europeans from the South to the North, and the great increase in productivity are
factors that created a great mass of people and of income, generators of accelerated
consumption. It is a period of great state intervention, also in the analysis of the
conjuncture and planning, demanding the elaboration of detailed statistics.

Of the State it was required, in its renewed role, formulas for labour political control
that could not correspond to its militarization, as practiced by the fascists and, even
less, allowing revolutionary propensities on workers. The capitalist accumulation of
the post-war period was carried on through technological and management
innovation, organization of labour, mass production, with the development of a
market tending to be global, open and not tainted with wars such as those of the last
decades; it was also achieved through objectives introduced into workers'
expectations, with easy access to diversified consumer goods, good wages and low
unemployment, guarantees against dismissal, social security, paid vacations, health
and public education. Certainly some of capitalism’s think tanks (Mises, Hayek,
Friedman), contemplating these "capitals" wasted on measures of social penchant
might have smiled and grunted... “we will catch you soon!"

This framework also converted the unions into a complacent and routine action,
without revolutionary pretensions, as it also did to the parties included in the leftist
spectrum. If this was to be achieved – and it was during the glorious 30 years – there
was no need to fear competition from the Soviet model, which had all those
ingredients but failed to achieve the mass production of consumer goods or the
freedom of expression existing in the West. The challenge to this accumulation model
– known as the European social model – arose from student and worker movements
in Italy and France in the period 1967/68, fuelled by a bureaucratic and conservative
education as well as by Ford-like massification of factory work. The quest for a
systemic, albeit minority, exit was fuelled by the Mao’s Cultural Revolution, USA
military intervention in Vietnam, Che's romanticism, while the traditional Communist
parties became sane, conservative, as was their electoral competition and not
complacent with the Soviet invasion of Czechoslovakia (except the Portuguese
Communist Party).

Normalization, standardization, and social pacification also went through national


party systems and models of representation. The favourable conjuncture pointed to
conservatism and the acceptance of formulas of alternation between two parties, a
combination of rotation with bipartisanism between two political formations little

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differentiated but that served to fit the popular hopes in one or the other, nothing of
substance being altered.

Translation - Right group “we want the pots* again”. Left group “The pots* are in good hands
* in popular Portuguese language “pots” means stewardships

The swamp thus created marked a difference relatively to the period between the two
wars, with political turbulence between multiple and unstable party formations, with
the presence of fascist parties and militias and even of fascist regimes throughout
much of Europe. In fact, the harmonization that was achieved avoided war in Europe
(but not the guerrilla activities of the IRA, Brigate Rosse, RAF, or ETA); but, through
the instigation of the European powers and the United States' tutelage, promoted the
outbreak of war in Yugoslavia, some twenty years later.
(to be continued)

This and other texts at:

http://grazia-tanta.blogspot.com/

http://www.slideshare.net/durgarrai/documents

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