Industrial dominion and trade.

Henry Ford is said to have remarked that his employees should earn enough to afford the cars they made, which is sensible because mass production is for mass consumption, a mass that included Ford’s factory workers. Other employers did not all agree, however, as high wages necessarily reduce profits. They saw no reason why their workers should own cars, while hoping that Mr. Ford’s well paid workers would buy their products. This is the major problem faced by mass production. When the private property of the means of production demands profit/interest/rent, a maximum return on investments contradicts the wages that allow mass consumption. Low wages mean insufficient consumer demand, and high wages mean insufficient profit.

The simplest and oldest solution to mass production, and insufficient demand because of low wages, is foreign trade. Surplus consumer goods are exchanged abroad for luxury goods or, better still, for raw materials. The classic example is the industrial revolution in England and the cotton trade with India. Raw cotton from India was spun into thread by the new steam machines, and sent back to India. This put the Indian cotton spinners out of work, while the English spinners stayed in rags and the large profits built more and more cotton mills. Only a fraction of the thread was being consumed in England, so only a fraction of its value was paid in wages. However, the redundant Indian spinners were buying fewer clothes, which meant less thread and the closing of mills in England. Later came mechanical weaving, and the American market for raw cotton and consumers. But America had gained independence and soon industrialised itself, whereas India had to wait almost two centuries.

Importing investments and exporting consumption means the added value that is not consumed is invested. The value added by labour is consumed elsewhere and returns as investments. Henry Ford’s remark no longer applies, because workers need not earn enough to consume their products. This has been the model for all industrial nations. But its application cannot be universal and has obvious limits. The model has favoured a few nations with industrialisation and full employment, to the detriment of the many who produce only raw materials and cash crops, and have mass unemployment. Machines are concentrated in a few countries, and the majority world is out of work, as all their traditional craftsmanship has been swept aside by mass produced synthetic equivalents.

Exchanging consumption for investments on the world market means that investments can grow faster than consumption and profit/interest/rent can outstrip wages and taxes. However, as labour in the majority world was made redundant - as had been the Indian cotton spinners before – consumer demand was concentrated in a few hands, those of corrupt governments and their military supporters. Flagging growth was countered by arms sales and constant conflict, and by encouraging the majority world to consume now and pay later. These growing debts led to a crisis in the mid-1990s, when several nations saw their creditworthiness fall very low and were on the verge of bankruptcy (Mexico ’94, Thailand ’97, Russia ’98).

The early 1990s were a turning point, where the end of the Cold War allowed China to adopt the classic model for industrial expansion on a grand scale. (The process started in the 1970s under the Nixon administration. Its “most favoured nation status” was restored in 1980, but China only joined the World Trade Organisation in 2000). For the past three decades, China has been importing investments and exporting consumption, and has accumulated capital at a speed unequalled by any of its predecessors. But, being a late comer, the method of development has evolved. Being the first nation to industrialise, England did so mainly with home-grown technology. When other nations followed suit, they all developed along similar lines, and a new technology was quickly copied by all. By 1940, the major industrial nations – Britain, the USA, Germany, France, Italy, the USSR and Japan – had very similar industrial structures centred around armaments, though none could match America’s productive capacity. After the war, the victors continued the arms race, East against West, whereas the vanquished were banned from the competition. Both Germany and Japan had been severely damaged, their industry and infrastructure were in ruins, and they had no colonies to exploit. They slowly reconstructed themselves from the rubble up. The first phase was all investment and very little consumption. In this they were assisted by the US, where investors were feeling the aftermath of the war boom. When investments began producing consumption, Germany and Japan promptly exported it, to import more investments. But, lacking the neo-colonialists’ privileged access to the majority world, their only possible customers were the industrial nations, first America with whom they already shared financial interests, then Europe and the world. By the 1980s, Japan and Germany had conquered large shares of the global market for cars and cameras, machine-tools and motorcycles, sound and video, et cetera, and had become the second and third largest economies.

Japan and Germany showed the way and China is following in their foot-steps, American investments, then the American consumer market, Japan, Europe and the world. China is drawing in investments and pumping out consumption. And, as with the Indian cotton spinners, people are loosing their employment right across the industrialised world. This should have resulted in a fall in demand. Except that China is trading with the richest nations, where well paid industrial jobs are replaced by services and the difference in incomes is compensated by consumer credit. Or at least was, as this process may be a thing of the past. The credit crunch was the first collapse of the post-Cold War global market. And the huge volume of debts that has piled up and is still growing may take a decade or more to resolve. Meanwhile, other global events are shaping up, climate change, the end of cheap energy, dwindling mineral resources, population growth and urban concentration, food, water, deforestation, biodiversity… China may be developing a model of society that is approaching the end of its historical cycle, which brings the Roman Empire to mind. Then, the cheap source of energy came from slaves. But slaves were the booty of Roman conquest, so that the resource grew, peaked and contracted, as did the limits of Roman dominion. The decline of Rome began with the rising price of slaves. To-day’s Empire is based on the cheap energy that fuels all its machines. These fossil and hydroelectric resources grew, they will peak (may have already) and will inevitably decline.

The credit crunch brought growth in consumption to a standstill. Governments have tried to fill the gap by borrowing more than ever. But there is no reason why subsidising the banks and the car industry should help the millions who have borrowed the income of several years to buy a home, and are struggling to pay their monthly instalments, or those who have overdrafts and revolving credits that equal their monthly earnings. Mass consumption needs a plethora of well paid jobs, which does not seem a likely prospect for the near future, with redundancies everywhere. Shrinking employment in the industrial countries will reduce consumer demand world wide, and China must either close factories to produce less, or develop its own consumer demand, or both. If growth in investments is to continue at the same rate, there can be no redistribution of added value. This means that wage increases would be inflationary, and that consumer demand can only grow with consumer credit. However there is no certainty that the Chinese will take on debt as willingly as have Americans and Europeans.

The struggle of nations.

The Cold war was the acme of insurgency. The two super powers, who were held apart by mutual nuclear destruction, conducted a war by proxy throughout the post-colonial world. The slightest disturbance in one sphere of influence was immediately supported by the other. However, as America’s allies were the colonial nations of Western Europe, decolonisation made them an easier target than the Soviet Bloc behind its iron curtain. Each new nation was wooed by Moscow. In the case of a refusal, the opposition would be courted. And, if the union was accepted, the opposition could rely on support from Washington. The Cold War was power play in ideological clothing. Liberalism and communism had to be incompatible because the adversaries had chosen those two banners, though neither was either. Proving this Manichean notion was a cover-up for world supremacy. It meant arming rival factions and encouraging violent conflicts all around the world. The imperial purpose turned the delicate process of nation building into an endless blood-bath.

The Cuban insurgency was possibly the most emblematic and mythic. It was also the most improbable. That, on America’s very door-step, a few bearded peasants could overthrow a dictator backed by an army and a police force, and financed by United Fruit and Cosa Nostra, was astounding. The main reason behind this success was probably an ageing second-term war-weary president in the White House, who called back a joint Anglo-Franco-Israeli attack on Egypt in 1956. Eisenhower had put an end to the Korean War and had not given much support to France’s war in Indochina. He would not send American troops into the Sierra Maestra. The success of the Cuban insurrection was also due to its two very charismatic leaders, Guevara the theorist and Castro the organiser. Their background was South American, and they seem to have been more influenced by Villa and Sandino, than by Lin Biao and Giap. But all had in common a national liberation front and a people’s army. And their common enemies were absentee landlords, foreign control of the economy and a corrupt puppet government. Land reform, self determination and national pride appeal to a wide band of the social spectrum, which leaves the compradors out on a limb. The Cuban insurgency took place during a lull in the global power struggle (Khrushchev was busy trying to get rid of Stalin’s heritage and quarrelling with China), and no one could disapprove when Batista and his gangster friends fled Havana . But things were about to change, with a new American administration, a blockade of Berlin and “Cuban” missiles. And, for the following quarter century, the Cold War would be very hot in the majority world of budding nations. Orwell imagined three super powers that changed alliances and colluded. Alliances did change between Eastasia, Eurasia and Oceania, but the contest for wealth and power was as real as the death counts. A costly protracted war was soon deemed better than a fallen domino.

The American involvement in Vietnam and the Russian involvement in Afghanistan mirrored each other. They were the moments of the Cold War when the two super powers engaged their combat troops in wars they could not win. Armies have always been trained to fight other armies in total war. They are not adapted to the policing of native civilians. The limits of the operations were also a handicap. America barely hesitated in bombing North Vietnam and neighbouring Laos and Cambodia, but could go no farther. And the Soviet Army could not even envisage bombing Pakistan. In both cases the insurgents disposed of a safe-haven protected by a line that could not be crossed, a base that provided equipment, training and comfort. With the end of the Cold War, the assistance given to insurgencies by the two protagonists stopped quite suddenly. Insurgents were left to their own devices, no more money and weapons, no Ho Chi Minh trails, no Stingers, no protective line.

Since the events of 1989/91 insurgents are no longer involved in a global conflict between two super powers, and have had to fend for themselves. Some went out of business and joined main stream politics, some retreated to the inaccessible regions of their ethnic roots, and some turned to the illicit trade in drugs, diamonds, gold et cetera. But, in the Muslim world, old-new concepts and solidarities were shaping up as an international movement. Its origins can be traced back to the Iranian revolution of 1979 and the founding of an Islamic republic. The Iranians were virulently anti-American. This made them potentially pro-Soviet, though there is little evidence of such an alliance. As they were also Shia and republicans, the Sunni kingdom Saudi-Arabia felt especially threatened. In response, and with America’s blessing, the Saudi launched a Wahhabi revival. A very strict Sunni fundamentalism that was propagated from Nigeria to the Philippines, by the funding of schools and mosques dedicated to this obedience. With almost unlimited means the manoeuvre was a huge success. Madrasahs and minarets sprang up everywhere, and a new fervour animated the Coranic faith. But the reformation that had begun as a cynical move in the geopolitical game was soon to live a life of its own. It came into contact with those Frantz Fanon called “the damned” and was radicalised, notably among the Afghan refugees living in Pakistan. And, for as long as the Soviet army occupied Kabul, the Jihadist enthusiasm of the Taliban was encouraged and supplied with weapons. However, when the Russians pulled out of Afghanistan, the American, Saudi and Pakistani Services seem to have been totally overwhelmed by their own creation. Mullah Omar and his Coranic students ruling over such a strategic cross-road pleased no one. Then an aerial attack on the US was planned there, which made matters much worse.

The Wahhabi reformation straddled Islam, linking Asia to Africa, and Trans-Caucasus to Sub-Sahara. When the interior struggle for faith and morality was exteriorised as a struggle for power, the result was as explosive as ever. Fundamentalism is a powerful force. It steeled the Protestants of Europe against the Inquisition and the counter-reformation. Having been dictated by God, the laws of Moses superseded the decrees of kings and princes. Submission to the edicts of a lonely deity was a rebellion against the petty tyrants of the material world. Literacy and the printed vernacular Bible broke up the European feudal society and replaced it with nations. And, having levelled society, the Scriptures became an ethnic bond. God spoke in many tongues, to each nation its own. Much of Islam is still in the grips of feudalism and illiteracy. Fundamentalism may be the necessary path to a literate nation united by a written vernacular. According to McLuhan’s hypothesis that the medium is the message, the Koran can be a nation builder as were the Old and New Testaments, and the Little Red Book.

The Pashtu insurgency against the US led coalition in Afghanistan has spread to Pakistan. This shows clearly that it is a national movement divided by a colonial frontier, the Durand Line, and does not bode well for its resolution. It also suggests that the Afghan ethnic patchwork may become a federation, but will never be a nation. The vernacular and the particular culture it transmits are the basis of a national identity, so that two (or more) linguistic groups cannot coexist within a nation without one dominating the other(s). The majority rule of wealth and numbers will always impose one language as representing the whole nation, to the exclusion of the other(s). But linguistic minorities can be very resistant over time. After seven centuries of English domination, the Welsh are still fighting for cultural equality. After the Treaty of Sèvres, which divided up the Ottoman Empire between the victorious allies in 1920, the Kurds had to be Turks, Iranians, Syrians or Iraqis. They are still fighting for a homeland of their own. There is no reason to believe that the Pashtu will show less resolve, which applies to all the other nations that live astride the colonial borders of Afghanistan, Tajik and Uzbek, Turkmen and Baloch, Kashmiri and Iranian.

Nations are cultural concepts that differentiate themselves by the media of culture, by speech and the written word. They are a step beyond the rule of might and feudal hierarchy to a social contract among equals. An equality that presupposes cultural homogeneity through a common language. Many European nations are still divided internally by linguistic, religious and historic differences. Whereas the US is an immigrant nation, and successive waves of newcomers from all over the world have had to adapt to the mould and abandon their ancestral heritage. (Though the states taken from Mexico may soon develop their Hispanic culture to the point of claiming cultural autonomy). Melting Pot America has an established dominant culture symbolised by Thanksgiving and the 4th of July. The unquestioned predominance of the English story is made possible by its structure. The American tale is not about ancestry, filiations and roots. It is about arrival, construction, expansion and conquest, which means that newcomers are as much a part of this dynamic process as those who came before them. America is a nation of immigrants who move around the continent with a sense of possession, but no sense of belonging. “This land is our land”, from ocean to ocean. Such an abstract concept of nationality does not apply to most human groups, least of all to the Pashtu who have seen Greeks, Huns and Turks, Arabs and Mongols, English and Russians, come and go in the valleys beneath their mountain strongholds.
The Pashtu insurgency against the coalition’s presence in Afghanistan has spread to the Tribal Areas and the North West Province of Pakistan. It is not unlikely that this will enflame neighbouring Baluchistan, and Kashmir. What began as a retaliatory strike against Osama bin Laden and his brain-child Al Qaeda is turning into a situation where the occupying forces face a nation in arms. Crushing the international brigades and destroying their Tora Bora stronghold was a straightforward military operation in a free-fire zone. Helping the Northern Alliance to take Kabul back from the Taliban was essentially a matter of fire power. Submitting a mountainous region that stretches from China to Iran can only be envisaged at a great cost in human lives. In fact history seems to show that only the total annihilation of a nation can insure its submission. Short of that, resentment will reach boiling point and bust into violence, again and again. A nation can be annihilated physically, as in Antiquity when the price of rebellion was death or slavery. And many nations have disappeared over the course of history. But extermination, except for the inhabitants of the fast receding tropical forests, is no longer acceptable. The modern alternative is to chase people off their ancestral land and concentrate them in camps, where they can be safely guarded. Refugee camps on the periphery of a war zone are more easily controlled than “strategic hamlets” inside the zone. The American surge in Afghanistan next spring will push refugees across the Durand Line, where they will join other refugees fleeing Pakistan’s military offensives in Swat and Waziristan. They will move East, South and North, spreading anger and resentment. So far there are just a few camps in Pakistan, many refugees lodge with the inhabitants of their place of refuge. But, if their numbers increase significantly, this may no longer be feasible, nor desirable for the authorities who will want to avoid the dissemination of subversion. The programmed escalation of violence in Afghanistan will provoke a humanitarian tragedy and will wake a nation from its medieval slumber. Just another blood offering to the sacrosanct frontiers drawn in the chancelleries of Europe, as they divided up the world they were conquering. Or it may be that nations need more than literacy, that they must then construct themselves by a desperate struggle for existence.