The strong accumulation and careful preservation of capital in the West
began during the Renaissance, when European markets began to develop. Capital
was mainly accumulated through trade in the wider parts of the European
continent, especially in the Baltic, along the North Sea and in the
Mediterranean. Over time, Europeans began to trade around the world. They
created separate colonial empires (Portuguese, Spanish,
Dutch, French, English), within which trade was free, but the empires fought
each other for space and for a monopoly in trade. However, although capital was
collected all over the world, it would accumulate in only one city at a time.
These were Genoa, Amsterdam, London and New York in a row.
The first round of strong capital accumulation took place in Northern
Italy (Genoa, Milan, Florence) and in the Adriatic (Venice, Dubrovnik). There
were two reasons for this. First, there was no strong royal authority in
northern Italy, and there the influence of the Papal State was weak. Byzantine
rule had weakened in the Adriatic. The holders of capital accumulation were
mostly republics. (Milan had a weak provincial king.) Second, these and other
republics had strong trade across the Mediterranean and the Black Sea with the
Far East and Asia.
However, after the rise of the Ottoman Empire in the fifteenth century,
trade with the East was significantly reduced and was taken over by France
through a political conspiracy under an agreement between French King François
I and Sultan Suleiman I in 1536. The northern Italian and Adriatic republics
began to decline rapidly and lose accumulated capital. The capital was
preserved only by Genoa, which Venice had previously excluded from trade with
the East. After that, the Genoese in the diaspora were engaged in banking and
trade in money, gold, silver and financial securities. In addition, Genoa was
early involved first in Portuguese and later in Spanish overseas explorations
and conquests. In the early sixteenth century, Genoa came into alliance with
the House of Habsburg, which ruled Central Europe and Spain. Genoese capital
had the “external” protection of the Habsburgs.
The second round of accumulation of Western capital took place in the
Netherlands, which soon after the liberation from the Habsburg crown in 1588
became the world’s first political, naval, trade and financial superpower. The
Netherlands ruled Europe and the world’s seas until the early eighteenth
century. Her estates were in North America and the Caribbean, Australia and
Indonesia. (The Dutch had 10,000 ships with more than 150,000 sailors in the
world at one time.) The Dutch formed the first “open society,” so
Jews, Huguenots, Calvinists, Puritans, and members of other minorities and
apostates flocked to the Netherlands. They brought skills, knowledge and
capital to the Netherlands, which multiplied strongly there. A considerable
part of the Genoese capital overflowed into the Netherlands, when that capital
lost the protection of the weakened Habsburgs.
The next political, economic and financial center of the world became
London in the early eighteenth century after the founding of the private Bank
of England in 1694, which credited the construction of the Royal Navy. The navy
conquered the world by serving bankers, merchants, goldsmiths and jewelers. The
English kings were servants of capital. Prior to that, Genoa had no king at
all, and there was no king in the United Dutch provinces either, which had a “regent,”
who was the commander of the Dutch army in case of war, but who had his kingdom
in the separate province of Oranje. Much of the capital accumulated in the
second, Dutch round flowed from Amsterdam to the City of London.
In addition to conquering vast areas on all distant continents, the English
and the British used the Industrial Revolution to raise capital, in which hard
human labor was replaced by the work of huge machines and plants (railways,
warships and merchant steamboats, huge industrial plants), which were served by
crowds of workers. The English accumulated capital through trade, industrial
production, military force, plunder, and financial business.
For a strong accumulation of capital, it was the turn of the United
States after the bloody Civil War (1861-1865), which President Abraham Lincoln
started in the first year of his first term, precisely to accumulate the
capital needed to conquer the whole ( indigenous) area to the Pacific Ocean
between Canada and Mexico. The area was to be conquered and transport and
communication infrastructure set up in it. In the period until the end of the
century, ie until the outbreak of the First World War, the USA protected its
market and the booming young industry with high tariffs and excise duties, so
that only capital could be imported into the USA. There was also an overflow of
British capital into the United States, because that capital was more prolific
in the United States than in Britain. By the end of the nineteenth century, the
United States had become the world’s first economic, industrial, financial,
military, and political world power.
In the fourth, American round of accumulation, capital multiplied by
industrial production, the seizure of land from indigenous peoples, the
establishment of monopolies and cartels, the reckless exploitation of the labor
of domestic people and immigrants, financial imaginations or speculation, and
lending to warring nations in two world wars. After World War I, President
Woodrow Wilson sought to establish American hegemony in the world through the
export of capital and the export of democracy using the League of Nations. He
was prevented from doing so at the Paris Peace Conference in 1919 by the
colonial powers Britain and France, which were also the victors of the war.
Such an idea for the postwar World War II was held by President Franklin
Roosevelt, who foresaw the establishment of the United Nations, the World Bank,
the International Monetary Fund and the (aborted) International Trade
Organization during the war. A world monetary system was established with a
base in gold, which came almost entirely into US ownership during the war. The
implementation of American intentions was prevented by the Soviet Union, which
was the biggest winner of the new war. The world was divided by an “iron
curtain” that could not fit into American hegemony.
Due
to the success of communism in World War II, capitalism shifted from the onslaught
to the defense. Capitalism saw danger in Eastern Communism and in Western
Labor. Capitalism needed to be saved. The so-called social capitalism or a kind
of corporatism was created, because the volume of production, product prices
and the level of workers’ wages were agreed upon by employers and trade unions.
Stopping the external, communist danger was accomplished by the hasty
reindustrialization of Germany and Japan. In the period of the so-called golden
age of capitalism, workers and states defeated in the war did well, but not
capital, which accumulated poorly.
However,
Richard Nixon was brought in for the presidency of the
United States, in order to break Roosevelt’s world financial and trade system.
On August 15, 1971, President Nixon severed the link between gold and the
dollar, so American gold could no longer be bought for national currencies of
members of the International Monetary Fund. Gold and all world currencies
became commodities on the free market. For all currencies and gold,
“floating” rates were introduced instead of fixed ones. Since 1971,
capital has been able to circulate freely on the world market. This was
especially true of the “eurodollars,” which had accumulated as the
earnings of American industrial corporations in Europe. The city of London has
readily taken on the role of free capital management.
After the collapse of the communist bloc in Europe, the World Trade Organization
(WTO), founded by President Bill Clinton on January 1, 1995, in the second year
of his first term, served as a means of capital accumulated in the United
States. Exactly one year earlier, President Clinton founded the market
organization NAFTA, which connected the United States, Mexico and Canada into single
market. The administration of President George W. Bush, which fought a
large-scale wars in Asia, did not, according to Republican custom, try to
replace the multilateral strategy of the Democrats with bilateral cooperation.
Under the administration of President Barack Obama, there was a new momentum of
multilateralism by trying to merge the European Union and North America (TTIP)
into one single market, and North America and East Asia into another, but
without China (TTP).
In the period from 1993 to 2017, America collapsed as a country or as a
state. There has been a deindustrialization of the U.S. by exporting industrial
capital and U.S. jobs first to Mexico and then around the world and especially
to China. In the US, old industrial cities and transportation infrastructure
have collapsed. There has been a technological lag in the US in communications,
but the proliferation of private digital networks – where tax-free earnings
accumulate – represents an expansion of the Hollywood entertainment industry. A
huge portion of American capital is wasted in the media. American industrial
corporations have become financialized, which means that they make more money
by using free capital than by technological inventions and the production of
material goods. (Boeing, General Motors)
The deindustrialization of the economy and the financialization of
industrial corporations created the need for financial speculation in the
United States, which led to the financial crisis and the Great Recession of
2008. America stopped working and producing, so the federation, federal states,
cities, manufacturing corporations, consumer banks, and citizens borrowed
heavily from domestic private and foreign state capital. Ingrained domestic,
American capital that had a foothold in agriculture, the military industry, and
energy (oil, gas, coal) began to crumble in favor of free, cosmopolitan, world
capital. Because capital governs America and because capital in the United States
is divided and opposed to each other, there has been a sharp division of Americans
into two nations, one of which is the “silent” Anglo-Saxon majority
and the other a set of vocal minority nations supported by “Eastern
media”.
President Donald Trump, who was undoubtedly brought to the White House
by endangered domestic capital, sought to establish the usual republican
geopolitical strategy, based on bilateral cooperation with other states.
However, Donald Trump was also brought to the White House to curb China’s rise,
so he supplemented US bilateral cooperation with one group of countries by (1)
refusing US cooperation with other countries and (2) political and economic
punishment of many third countries. President Trump has seriously cut taxes, to
boost the economy and create additional jobs. By the time the coronavirus
pandemic broke, it had more than halved unemployment (from 7.3% to 3.4%), but
most new jobs had been created in services, which were difficult to export.
That is why the American trade deficit has increased. (President Trump used
excise duties to force American corporations to return their capital to the
United States and create jobs there, but he failed to do so. He created new
jobs himself by reducing taxes in order to increase investment, while the
released money was partly invested in shares on the stock exchanges, and new
jobs were created in the service industries, not in the production of tangible
goods for export.)
To implement the political and economic transformation of the United
States, Donald Trump created a political movement, through which he
fundamentally changed the American national strategy. Donald Trump created
Trumpism, as a political thought, according to which America is first and
foremost (America First!) and even before cosmopolitan, world, free capital,
which did everything it could to remove Donald Trump from the White House.
However, Trump left, but Trumpism remained a nightmare of the new, democratic
administration of President Joe Biden.
Since the unofficial announcement of the results of the 2020
presidential election, think tanks have begun to compete with each other in
advising the new administration on how to restore American hegemony in the
world, which ceased due to the weakening of America as a state. The advice was
given on the basis of the common notion that America forever has world
political, economic, military and ideological leadership. Such inappropriate flattery of think tanks to the new American
administration is based on the dubious assumption that there is enough world,
cosmopolitan capital in the United States that they can rule the world again.
New capital recently accumulated in private networks (Amazon, Google, Facebook,
Twitter, Disney) rests on monopolies and is most often tied to unnecessary
services and is sure to come under attack around the world for monopolies and
for recent direct but careless interference in politics. The Internet and
e-mail help people learn and know or do business, and private networks are only
for entertainment, so their ability to raise capital will dry up. For the most
part, the previously accumulated industrial capital has already spread around
the world and enabled the industrial development of many underdeveloped
countries to its advantage.
However, as the U.S. declined for nearly three decades, the rest of the
world developed politically, technologically, and economically. Authoritative
political systems have been created or improved in many countries (China, Iran,
Russia, India, Japan, Indonesia, South Korea, Australia, Turkey, Brazil,
Malaysia, Gulf countries, Philippines, some EU countries and other countries),
which their citizens respect. The perfect opportunity for the introduction of politism was provided to all peoples by
the pandemic of the coronavirus, for the suppression of which the capitalist states
of liberal democracy could not be set in motion. (In capitalism, capital has
control over politics, the economy, security, and ideology. In politism, politics has precedence over
capital, the economy, security, and the belief system.) Britain’s withdrawal
from the EU is also calculated to establish economic nationalism. More and more
countries are indulging in economic nationalism and giving up liberalism, thus
strengthening their sovereignty. In addition, science and technology are
developing faster in the countries of ancient Asian and some European nations
than in the United States. This is especially evident in the areas of military,
space and digital technology, and biotechnology.
With the current situation in the United States – after Donald Trump
failed to save the United States from further decline – the fundamental
questions are: “Can the United States still remain a place of accumulation
of world free capital?” And “Can another country become a place of a
new, fifth round of capital accumulation?” The outcome of the US presidential
elections in November 2020 suggests that there could be a resumption of
multilateralism, exports of US capital and US “democracy” and the
export of colored revolutions, which happened so often during the presidency of
Barack Obama. In that case, the only capital which could be exported from the
United States, would be the capital created by financial speculations, which do
not help the United States, in which the living space and the well-being of the
people in it are endangered.
In my view, if the US is no longer prolific in accumulating capital – as
it used to be in Genoa, the Netherlands and the UK – and if capital multiplying
around the world would have to accumulate in one place, it could happen in one
of the two future places: in Israel or in China. This conditional conclusion is
based on a “linear extrapolation” of the past process of capital
accumulation from Genoa to New York: after the fourth, the fifth round of
capital accumulation should come. Israel is a candidate because (1) the world’s
accumulated cosmopolitan capital could easily flow into that country; (2) that
the people of Israel have always or since their progenitor Abraham shown a will
to establish world hegemony; and (3) that Israel has state-of-the-art science
and technology, which it could offer with capital to many developing nations,
in order to create in them a true productive economy. At the same time, Israel
could offer protection to such nations, because it is a nuclear power and
because it has an ubiquitous and effective intelligence service. The best
protection for nations would be provided by achieved economic growth and the
enjoyment of prosperity. Thus, for decades, the United States provided
protection to weaker nations through the Atlantic Alliance or other regional
military alliances. The United States was a benevolent hegemon, leaving nations
sovereignty and self-government but not allowing them to conduct foreign
policy.
Many economists believe that China could also become the site of the
fifth round of world capital accumulation. Such an idea is based solely on
economic growth and China’s overall strength. In 2020, China was the first in
the world in terms of industrial production, in terms of international trade,
in terms of total purchasing power, in terms of highway network (155,000 km),
in terms of high-speed rail network (38,000 km), in terms of 5G digital network
connections ( 200,000,000) and in grain production (670 million tons) The
Chinese economy reached a volume of $ 15.4 trillion and a „pandemic“ annual
economic growth of 2.3%, which was not recorded in 2020 in other developed
countries, where the economy has shrunk significantly.)
However, China cannot be expected to become a stronghold for the
accumulation of world capital, if all the factors related to China, to its
special and long-lasting civilization and to its political history are taken
into account. First, there has long been a populous real nation in China, not an
“open society” or diaspora, so capital will never rule China and the
Chinese. Second, China has a one-party system for creating and maintaining
“socialism with Chinese characteristics for the twenty-first
century.” This system is based on the acceptance by the people, that the
only political party leads China. This acceptance will last as long as the
Chinese Communist Party provides the people with progress and prosperity. This
forces China to primarily dedicate itself to the needs of its living community.
Contrary to that, the creation of world hegemony would necessarily lead to the
neglect of domestic needs. Hegemony is a great obligation, which has ruined the
United States and the American people.
Third, China has lasted for twenty-two centuries, during which it did
not indulge in militarism, colonialism, and imperialism: When it initially
broke through to the “natural borders” that can be defended, China
devoted itself to defense rather than invading other nations. The conquests
were organized by the Mongols, Manchus and Japanese, and of course by the
European peoples. In China, European peoples had cut down their colonial
possessions in the lower reaches of navigable rivers and in the coastal areas
of Hong Kong and Macao. China was a colony for more than a century (1840-1949).
Even during the reign of the first emperor Qin Shi Huangdi, the Chinese set up
protective walls around themselves, which were obviously not calculated on
imperialism and the expansion of space, but on the protection of space. The emperors
in the mid-fifteenth century gave up further naval construction and funding for
exploration in the Indian Ocean because budget funds were to be used to defend
against ground attacks from Central Asia. In my opinion, China has neither the
will nor the ability nor the courage to establish world hegemony. The certainty
of bilateral cooperation between the countries suits China. This is the meaning
of the Chinese project “One Road, One Belt”, which in time will lead
to the establishment of a global transport infrastructure, which is needed by
the global world and the globalized species of Homo sapiens.
Nevertheless, I am firmly convinced that the fifth round of capital
accumulation will no longer be based anywhere. This is a consequence of the
globalization of business and the globalization of the species Homo sapiens, which are underestimated
and which the scribes of capitalism from the think tanks do not take into
account in their judgments. Capital has globalized business thanks to the
appropriated and selfish freedom to travel the world, and now it has found
itself in a trap, which it has set for itself. Due to the global nature of
operations and the establishment of global supply networks, capital can no
longer easily move from place to place, because capital is most often invested
with the intention of longer-term fertilization, and the amount of free capital
is still limited.
A collective awareness has suddenly emerged in our species, that the
disturbed world climate and the coronavirus pandemic are seriously endangering
our species and life on Earth in general. For the needs of climate recovery and
the establishment of permanent “coexistence” with viruses, it will be
necessary to strongly, synchronously and evenly invest capital throughout the
Earth, ie to invest capital in all living spaces. It will be necessary to
create a global health system, which will have enough doctors and other medical
staff, enough hospital space and hospital beds, enough equipment and supplies,
and a global digital network to monitor the movement of people and search for
infected people. The species will need a worldwide network of top public institutes
to study pandemics and to work systematically on vaccine research and discovery,
as well as a reliable and extensive global vaccination network. The species
will need more well-educated doctors, and fewer trained waiters, disc jokeys in
nightclubs or tattoo experts.
Climate disturbance places heavier demands on capital than those carried
by virus pandemics. Capital, private or public, will need to invest heavily in
new technology, in new energy, in new production, in new modes of transport, in
new agriculture, in new water supply, in new housing and in new ways of life.
Investments in climate recovery must be ubiquitous and evenly distributed. Cleaning
of environment and climate recovery efforts in one place cannot improve the
general state of the climate if the climate deteriorates in other places. There
is also no general protection against viruses, if that protection is not
ubiquitous. Globalization, a disrupted climate, and virus pandemics have
created complete interdependence in the species.
In addition to investing in climate recovery and pandemic control, huge
investments will be needed to eradicate poverty and educate people around the
world. This will allow poor countries to develop faster, which will eliminate
the need for vicious mass migration, which is now shaking our species. The
migration of the hardest hit people will be manageable.
World business can no longer be globalized and spatially fragmented.
Climate cannot be globalized. The species Coronavirinae
cannot be globalized and divided into strains bounded by national borders.
The global species Homo sapiens can
no longer be confined to limited habitats. Since life on Earth cannot be deglobalized,
there will inevitably be a globalization of capital, ie its spatially and
demographically uniform distribution, which is at odds with global freedom of
capital and its urge to be gathered around the world and accumulate in one
place or in few hands.
Capital, by the inevitable and forced loss of freedom, will change nature
or temper, not just hair. Capital will have to take responsibility for space,
people, climate, the health of our species, and for the Earth and for life on
it. Capital will cease to rule the species and the Earth, and will begin to
serve them. This will put an end to capitalism as a way to regulate the economy
and living communities in our species. A worn-out carriage of capital cannot be
usable even with the fifth wheel.
The inevitable scattering of capital to countries and peoples will lead to the attachment of capital to labor and space. This will make it possible to replace capitalism with politism and to replace the sovereignty of capital with the sovereignty of the people. The sovereignty of the people is paired with their responsibility. Capital will take responsibility, but it will lose its former sovereignty. Capital will turn from a master into a servant of the species. This is a great and crucial consequence of globalization.
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