3. The competitive position of each imperialist and how it affects its view of inter-imperialist contention

In every imperialist country there are conditions that politicians can manipulate via nationalism. If conditions for nationalism exist, we can be sure politicians will arise to exploit it and voice it. The main voices of nationalism of specific imperialist countries as opposed to general "join the club" OECD chauvinism are the labor aristocracies of each country and the capitalists who are in immediate danger of being driven out of business, with their investments lost by competition. Before we turn to an examination of the possibilities of specific imperialist country implosions that would give rise to nationalism, we should point out that even small trade blocs such as NAFTA, APEC and the EU also get used by the finance capitalists to threaten other countries that they better get on-board with GATT or miss all the action. Hence, regional difficulties do not always spell doom for overarching imperialist arrangements, and may in some cases spur on tighter imperialist collaboration.

a. Japan's competitive global position

Japan is called one part of the "triad" of imperialist powers, with Europe and the United $tates the other two legs. There is a plethora of books and articles written about how Japan goes along with free trade in rhetoric while destroying it in practice. Many of the authors are worried about the U.$. and European position competitively-speaking.

Toward the tail-end of the contention between the U.$. and Soviet blocs, trade tensions with the United $tates worsened. Had Gorbachev stayed in power and managed to contain domestic forces for open capitalism in the Soviet Union, he could have enjoyed an increasing alliance with Japan and eventually Germany. The United $tates had given Gorbachev's new regime legitimacy and at least some in Japan's ruling class were starting to think that it was time to start threatening the United $tates with a switch of imperialist partners.

Out of just such fears the U.$. military translated a book by a Japanese parliament member named Shintaro Ishihara from Japanese into English. Stimulated by something Henry Kissinger said, Ishihara wrote that "Japan's technological superiority gave it a decisive role no matter what space-based weapons systems Washington or Moscow created."(101) The idea of Japanese technology linked to Soviet military power scared U.$. military intelligence. One trade between Japan and the Soviet Union in technology relevant to submarine technology was said to cost the United $tates $30 billion, because that is how much it would cost to update the U.$. weaponry to meet the new Soviet threat of better submarines.(102)

On the other hand, the height of the ruling-class instigated Japan-bashing crescendo was at the same time in the United $tates--the late 1980s. Many believed that with Gorbachev in power, the next real Cold War would be with Japan. In October, 1989, Newsweek reported that most Americans viewed Japan as a greater threat than the Soviet Union.(103) An Amerikan author in 1990 said that the Japanese intelligence system in the United $tates rivals that of the KGB (the secret intelligence of the Soviet Union).(104) Ishihara says he was more or less threatened with a U.$.-Soviet alliance in a visit to Washington in April, 1987.(105) In contrast, he wanted a simple trade bloc, "the group of two," which was the United $tates and Japan.(106)

One important reality behind the idea of such a bloc of two called the "G-2"(107) at the expense of the European powers is that the Japanese get around European tariffs by exporting from the United $tates. Political authorities in both Japan and the United $tates then rally behind the exports to Europe.

Without such a "G-2," Ishihara predicts that the Japanese will ally with Russia over China. He wrongly predicted that Japanese funds would rush into Eastern Europe and make it "part of the global network of Japanese technology." However, it is interesting to point out this line of thinking in Japan and its possible future relevance, because Ishihara predicted Japan would only start with investments in two East European countries, Czechoslovakia and Hungary.(108)

When confronted with global challenges, it is interesting how Ishihara casts his nationalism. It has a decided left-wing tinge, despite belonging to the supposedly more right-wing party of Japan, the Liberal Democratic Party. While he is a "hawk" for wanting the Japanese to build their own military planes including the FSX, he says repeatedly that Japan could cut its military spending if the United $tates would only let it. When it comes to the class structure, he is proud of how Lech Walesa told him Japan is the perfect socialist society and he rails at U.$. executives for their disproportionate pay, even compared with other imperialist countries. He even includes the system of life-time employment as a recommendation for the United $tates.(109)

As for regional trade blocs, Japan is pushing for U.$. participation in APEC. Like other imperialists, Japan wants to be part of the best trade bloc and by itself Japan has doubts about APEC compared with either NAFTA or the EU. One reason often mentioned for Japanese reticence toward its own geographic area is that the Koreans and Chinese still hold lingering animosity toward Japan for historical reasons. One survey of Asians in 1992 shows that around 70 percent would like to see Japan take a bigger leadership role in the region, but that was not the opinion of the majority of Koreans and Chinese. With the Amerikans playing, others may be more willing to take up "free trade" in East Asia. If there is a threat to Japanese investment in U.S. bonds it comes from not just Japanese flirtation with Russia and Eastern Europe but investment in East Asia. In 1989, Japan already had 51 percent of all foreign investment in Korea, 24 percent in Thailand, 42 percent in Malaysia and 34 percent in Indonesia—all countries where the Japanese share was the largest of foreign investors.(110)

The Japanese call to the U.$. imperialists goes as follows: "It should be crystal clear to the United States that it is part of the Pacific community, a group of nations with far greater stability and potential than the rest of the Third World."(111) This is pretty much a call to have NAFTA dumped in favor of Canadian and U.$. participation in APEC. The Japanese idea is to leave Central and Latin America behind, but if the United $tates leans away too far, Japan will make up for it with its moves via Russia and Eastern Europe. From Japan's point of view, the United $tates might reject a Pacific trade bloc, but only because "persistent discrimination by the white power elite against Japan and other Asian countries will undermine U.S. leadership of the free world."(112) The attractiveness of the Japanese call to the United $tates is bolstered by the fact that there were 33 million "affluent" customers in Asia in 1992 with incomes over $30,000 annually. By the year 2000, they should number 50 million. Relative to the size of Asia's population, it is less than 5 percent, and that should tell us something about the size of the traditional petty-bourgeoisie and labor aristocracy there, which is indeed a "thin stratum," but relative to U.$. and European markets, 50 million is nothing to sneeze at. By way of contrast, the top 500 multinational corporations of the world only employ 26 million people.(113) The response of the U.$. ruling class has been to acknowledge that APEC is more than 50 percent of the world's income, but it also believes that after the loss of per capita income in the 1980s in capitalist Latin America, "the United States will benefit greatly from Latin America's resurgence."(114) Thus the United $tates plans to add Chile to NAFTA immediately and then expand it to the rest of Latin America by 2005.

There are many attractive aspects to Japanese ideology constructed for inter-imperialist rivalry and positioning for global leadership. It is decidedly anti-militarist and in this we should also give credit to the Japanese labor aristocracy for being a rare labor aristocracy to oppose militarism at least weakly in the imperialist countries. While attacking white racism, Ishihara also says Japan needs to become more cosmopolitan. Some intellectuals in Japan, including the president of Tokyo University are urging that Japan take the lead in global environmentalism and become known as the economic leader for environmentally sustainable production. Others say that compared with other advanced industrial powers, Japan should also be known for its construction aid to the Third World. No one is saying to challenge for military supremacy or other "hard" forms of political power. Rather the Japanese people were embarrassed by the Gulf War in Iraq, with the United $tates as the rent-a-cop and Japan as the automatic teller machine to fund it.(115)

Many chauvinists, including some harbored at the New York Times, believe that Japan will beat the United $tates at its own peaceful free trade game only because Japan cheats. The chauvinists receive some support from the figures of the 1980 to 1985 period that show that Japan only absorbed 0.3 billion dollars a year in direct investment from abroad.(116) On the other hand, one might also ask how many investors would be willing to put up with the low profit rates in Japan relative to those available abroad. Not the cost of using capital in Japan, but the profit rate in Japan is one snag to perfect integration of imperialism. That profit rate is low, because the Japanese capitalists are far above the average in re-investing in productive capacity. The main reason that there is no penetration of Japan by foreign capital is not cultural barriers put up by Japan. The main reason is simply that to compete foreign capital would have to invest at the Japanese rate and put up with the profit rate there.

"'On average between 1976 and 1983, investment as a share of nominal GNP was 31 percent in Japan compared with 18 percent in the United States, 20 percent in the United Kingdom, 22 percent in West Germany and 22 percent in France.' At the same time, however, operating profits as a percentage of sales in the manufacturing sector have declined steadily from some 9 percent in the early 1970s to a current level of around 3 percent. Indeed, one Japanese economist has argued that if 'proper valuation adjustments are fully applied [to capital assets]. . . Japanese rates of return may have been negative."(117)

Some Amerikan capitalists have gone to Japan to buy stock in companies to force them to pursue a short-term profit orientation. It turns out that Japanese laws are nothing like Amerikan laws. Stockholders do not pick a board of directors that in turn hire managers of corporations. It's quite the other way around. The managers select the board of directors. In fact, shareholders do not even have much leverage over the dividend rate. They are lucky to receive small dividends.(118) Whereas 82 percent of after-tax profits went to shareholders in 1990 in the United $tates, the dividend yield in Japan was 0.43 percent.(119) Yet in a situation where there is so much capital and such a high savings rate, Japan's structure is appropriate. Even if Japan changed its laws, the underlying fact of life would be that Japanese capitalists would accumulate fixed capital faster and drive foreign capitalists out of business eventually anyway.

There is much hand-wringing over Japan's growth rate in recent decades, because it has gone beyond catching up with U.$. imperialism to actually surpassing it at least in several areas. All kinds of complicated historical and cultural explanations are used, but from one point of view the reason for Japan's economic growth is very simple. It's accumulation rate has boosted its capital-labor ratio above that of the United $tates. One estimate puts half of Japan's labor productivity catch-up with the United $tates to its increased capital to labor ratio.(120) Some believe Japan will save less as it ages and face a labor shortage. Others believe the upcoming labor shortage will be an opportunity for Japanese wimmin to join the workforce and a chance for Japanese capitalism to shed some workers in some inefficient areas, like the distribution network.

Paid by Japanese Sanwa Bank to write his book on international finance capital integration, Richard C. Marston argues that one does not have to be in a country to buy all its financial instruments. Hence, capitalists operating in each advanced industrial country face the same costs for borrowing capital according to Marston, and other economists like Adrian Wood who assume such a fact for modeling convenience.(121)

From the perspective of the Japanese bourgeoisie, the international market does influence what goes on in Japan and it matters little that there is not much actual foreign capital there. The Japanese drive up the price of their stocks far above what they are in other countries already and their real estate prices are also much higher. When the yen is low, the exports increase, but when the yen is high, purchases of assets increase. Even when the Japanese government turns to direct internal stimulation of the Japanese economy, apparently there is some consumption stimulated, but most of the effect goes into purchases of assets within Japan. "The year 1987 is also known as the year of 'asset inflation'; the national average of land prices (as officially posted by the Land Agency) increased 25 percent during 1987, the largest increase in fifteen years. In particular, the land price in Tokyo increased 69 percent, the largest increase since the survey started in 1971."(122) It is common to hear that the cost of the Imperial Palace grounds is now more than all the real estate of Canada and all of Japan's real estate combined is equal to 60 percent of all real estate in the world by price.(123) A number of Japanese spokespeople and academics have tried to figure out how to increase the living standard of Japanese consumers by 20 to 40 percent, because that is what would seem necessary to bring those living standards into line with international prices; yet, so far, there is talk about reforms but only limited success in implementation.(124) Hence, on average foreign capital is not missing out on great deals in Japan at the moment. Now Japan is driving up U.$. and Australian real estate and stock prices and contributing as a main force behind the decline in the rate of profit.

Rather than think of the market in Japan itself, we should think of Japan as the dynamo of imperialist capital accumulation. In 1989, it held external assets of $1.771 trillion and capital exports for that year were $87.9 billion. More than any other imperialist country Japan invests in the Third World and its Third World investments are concentrated in manufacturing. Thus Japan is a true global force of accumulation and an important injector of surplus-value into the system through its profitable Third World operations. (125) As late as 1985, Japan was only third in foreign direct investment held in the world, with England second.(126) The $1.771 trillion figure does not count liabilities, which is a measure of how tied up Japan is with the world it invests in. The figure known as "net assets" rose from a mere $10.9 billion in 1981 to $383 billion at the end of 1991, because external assets grew to surpass $2 trillion that year. That made Japan number one in foreign investment.(127)

The race to direct investment in the imperialist world is most significant in the case of the United $tates, because the United $tates is the global superpower that could have pretensions of cutting other imperialists out of the surplus-value by acts of force. Noteworthy in this regard is that Japan became the number one direct investor in the United $tates in 1992.(128)

More important is that Japanese money now plays a major role in the stock market and in the purchase of U.S. Government bonds. On June 23, 1997, Japanese Prime Minister Ryutaro Hashimoto caused a crash in the stock market indices by threatening to have the Japanese government sell its holdings of U.S. Treasury securities. The Japanese government owns $500 billion in these Treasury notes,(129) which are bonds to cover the U.S. Government budget deficit. The sum of money is enough to cover two or three years of U.S. Government budget deficits. The Japanese insurance companies and banks own even more of the bonds that pay for the U.S. budget deficit. Just as the complaints about investment in Japan by the New York Times are mainly false, the likelihood of Japan's finding something more profitable and safe to put its money in is also low. Until East Asia is further along in development, Japan has its own economic interests tied up in propping up U.$. imperialism. When the Japanese Ministry of Finance saw how much trouble the Prime Minister's remarks caused, it went forward to take back the remarks. It assured the market that Japan would not be selling off U.S. Government bonds and causing a ruckus in the markets. (If the Japanese sold their $500 billion in U.S. bonds, the interest rate would go up and the supply of dollars on the market would increase while the supply of yen decreases, which drives down the dollar. If the Japanese bought bonds elsewhere, the global interest rate would go back down and the net result would be higher interest rates paid to finance the U.$. deficit.)

Behind the Japanese imperialist outreach is the domestic accumulation of capital that long ago reached the breaking point. Each year, the Japanese save 15 percent of their income in what is called "holy poverty." On a per capita basis, the investment spending of Japan is twice that of the United $tates.(130) When Wall Street collapsed on October 19, 1987 to suffer its biggest ever one-day loss which was nearly 25 percent, the MOF had lunch with the four biggest Japanese banks. With a nod of the head from a MOF official, the Japanese stock market recovered its 15 percent loss, had its biggest trading day and rallied to start the boom of the rest of the 1980s.(131)

According to Marston, while the Japanese may have been last to lift certain capital controls amongst certain capitalist countries, they have been lifted. On one item of interest to communists, Marston shows that the industrial corporations are becoming more like bankers themselves. Nothing more clearly demonstrates this than the growing role of corporate bonds, which are promises of corporations to pay debts with interest. The rate of such financing is now comparable in Japan to that of the level in France, while the United $tates is the furthest along in this partial morphing of industrial capital into bank capital.(132) Any industrial capitalist with long-term competitive position can morph into a banking capitalist without leaving his/her office. Only non-monopoly capital stuck in uncompetitive commodity-production cannot take up banking. So it is that even in industrial corporations, the executives may pay more attention to gaining profit streams from speculative financing than in anything related to their core business. Those capitalists who do worry about their core business can only face the music of over-capacity. Such is the decadence of imperialism today, such that a good CEO knows s/he cannot fight over-capacity, so s/he might as well be a coupon-clipper.

If there ever did come a time when the Japanese allowed the greatest profit-taking and if bond-holders internationally were excluded from buying bonds in Japan, then we might see a more bellicose attitude by national sections of finance capital toward Japan. Such would be a material basis for an inter-imperialist war against Japan. Otherwise, in general, the global bond-holding elite advises the rest of the world to bite the bullet of competition when it loses and be real free traders enough not to go to war just for losing the economic competition. Bond-holders have this confidence and willingness to advise countries on their integrity in competition as long as they themselves are allowed to switch to the winning side quickly, and currently they like their prospects of doing just that--of never losing the competition between nations, because they can always move their investments.

Partly the Japanese international role is driven by the parameters set by the finance sector: the interest rate available to banks in Japan has been below 1 percent for long periods of time. When this happened in the United $tates in the 1970s, it was a subsidy to banks by taxpayers, because real interest rates (adjusted for inflation) were negative. Related to this, many believe the cost of borrowing capital is lower in Japan than elsewhere and this is a peculiar advantage of Japanese corporations when competing abroad. Marston counters this line of reasoning by saying that there is a deflation going on in the Japanese manufacturing sector relative to the U.S. rate of price change. Readers can follow this logic by thinking about deflation. Paying one percent interest on capital is indeed exorbitant if deflation runs at 20 percent (which is negative inflation of 20 percent). Then the real interest rate is much higher than 1 percent. In addition, Marston says that American companies also usually borrow below the so-called "prime" rate, so to be fair,(133) comparisons of the interest rate have to look at who is allowed to borrow at what rate with what frequency. This conclusion about the actual integration of capital to such an extent that Japanese companies face the same costs of borrowing as other countries' companies is probably the most famous of Marston's excellent book sponsored by Japanese banking capital.

In rebuttal, R. Taggart Murphy says that the Japanese only allowed the overseas market in Euroyen to give the whining Western bankers something to do, since they open up shop in Japan but can't make any profits. Allowing for overseas debt issue in yen gives the Western banks a piece of the action. Another piece of the action ends up being introductions to longer-term deals for Japanese banks. In any case, Murphy is criticizing Marston's choice of statistics to look at. According to Murphy, the overseas yen market is phony. Japanese companies use other companies abroad, especially in the secretive Cayman Islands to buy the Japanese securities overseas. Then eventually those securities come back to Japan. Fortunately for the MOF it has more control over the overseas bond market than it would have if Japan started an internal bond market, because an internal bond market would have Japanese political constituencies.(134)

From our perspective, Marston and Murphy probably both have their fingers on important facts, but overall the mass of capital in Japan and the profit rates are the real reason why foreign capital does not penetrate. In the past capital controls and bureaucratic control to protect Japan's domestic capitalists was the reason, but today it is simply the logic of capitalist accumulation that makes the Marston and Murphy debate interesting but moot.

In addition, the Japanese role is driven by the politics of realizing surplus-value. Since the United $tates more or less continuously threatens to close shop to Japanese business, it helps in relations between the two imperialists that the Japanese set up shop in the United $tates and build their autos there. Even Martin Carnoy who firmly believes that capital still has a predominantly national character also believes that auto is an industry that is losing its national character amongst the advanced industrial countries.(135)

One last point we would like to make about Japan is that it argues that the reason for trade deficits is the government deficits of other countries. If the people and the government go into debt in a country, they are consuming more per person than a country that is just as rich but saves its money. With this explanation, even if no country has economic nationalism, there will still be trade deficits. The countries with large government deficits will consume more imports because they are consuming more of everything per person, but the country with no government deficit and high personal savings rates will not then suddenly import more, so there will be a trade deficit just because of the different propensities to consume, not because of different ideas about other countries' goods. Government deficits lead to trade deficits which lead to exchange-rate changes which lead to central banks of each country having to do something to stop exchange-rates from moving around too much. The Japanese government runs deficits, but no one cares, because the overall propensity to consume is low. One bourgeois economic view of this process is that the government and personal consumption of the workers must be clamped down on or a decline in competitiveness will result. Alternatively, some believe that if they let their currency exchange rate go down,(136) then imports will become more expensive and exports will become cheaper and the trade deficit will be eliminated. The imperialists actually do not allow exchange-rates to completely float without intervention, perhaps because it makes economic planning of the capitalists in each country too difficult and because currency speculation has a life of its own that can add to the confusion of capitalists trying to figure out if they can profitably import or export their goods. A company board of directors may have a competitive grasp of its core business, but wild exchange-rate variations can wipe out any capitalist engaged in world trade. This is something the ruling class itself does not appreciate. It is one reason the European Union has a chance of adopting one currency.

b. The United $tates' global competitive position

MIM writes mostly about the United $tates, but here we would like to add a few points in terms of the U.$. competitive position via the other imperialists. The overall picture once again is one of finance capital's international integration, but we should look at the peculiarities of each imperialist to see where future conflict might arise.

The self-image of the U.$. imperialists is that they are more competitive than the Europeans, because they are less social-democratic and have more flexible wages, by which they mean flexible downwards. In 1960, the 12 countries of the European Union averaged 31.8 percent for the government role in the economy as measured by Gross Domestic Product. By 1994 that figure was 51 percent. In contrast the same figures for Japan rose from 17.5 percent to 35.8 percent, with some analysts pointing out that the Japanese company plays a bigger welfare role than in other countries. In the United $tates, the resistance to social-democracy is greatest, with the government having a 27.0 percent role in 1960 and a 33.5 percent role in 1994.(137) Karl Marx regarded all government activities as unproductive labor; hence, by not even including the commercial sector, the lawyers or the security guards, the majority of Europe's economy is unproductive sector as of 1994.

We should also look at the breakdown of the government expenditures. When we look at the expenditures for social protection, 22 percent of the 15 EU countries' budgets went to social protection versus 15 percent for the United $tates.(138) Adding to downward flexibility of wages in the United $tates is that 14 percent of the population is in poverty, compared with 7 percent in Canada, 5 percent in the "United Kingdom," 5 percent in France, 4 percent in Sweden, 3 percent in the Netherlands and 3 percent in West Germany based on figures ranging from 1984 to 1987.(139)

The U.$. imperialists also believe they are more competitive than the Japanese, for racial reasons given by Hitler(140) and bourgeois propagandists since. The mantra is that the Asians only copy and cannot lead research and development. This message can be said to be designed with the white oppressor nation workers in mind.

The virtually official line of the bourgeois pulp market is "As the society with the broadest personal freedom and the greatest freedom of immigration, the United States is the laboratory in which most of the new economic and social structures of the knowledge economy are being tested and developed. The open U.S. system has no rival in unlocking the creative capabilities of its people."(141)

The U.$. imperialists also have confidence in their abilities of global competition, because they believe they won the competitive battle against "totalitarianism," in the Cold War. Socialism is supposedly bad for innovation; even though one socialist country did so well in the 1930s by continuing to grow in the midst of global depression that Hitler felt compelled to invade it or be conquered. Despite the Nazi invasion, the technology of the Soviet Union advanced so fast that it became one of two military super-powers and started the research that put up Sputnik in 1957, one year after the capitalist restoration in the Soviet Union started. If it had not been for World War II, the statistical trends showed that the Soviet Union would have surpassed all the capitalist countries. Given one chance, one socialist society nearly beat all the capitalist ones combined. All that is forgotten and today the triumphalism of capitalism is heavily mixed and intertwined with the triumphalism of white-collar workers.

Despite the initial Soviet lead in rocket science which diminished and reversed with the restoration of capitalism, bourgeois authors today write that "the first political casualty of the information age is the communist state system, based on a 1920s-model hierarchical industrial organization and incapable of incorporating new, flexible management or rapidly changing technology. The inflexible communist state and the inflexible production system were so tied to one another that they collapsed together under the stress of world informatization."(142)

A more reality-based part of the U.$. imperialist self-image is that U.$.-based multinationals do start with a home-base. Finance capitalists have integrated internationally to assure equalization of profit rates amongst imperialist countries, but at the level of commodity production things are still nationally-based for large countries. Since finance capital is integrated amongst imperialist countries with a few exceptions, commodity production and its export markets are of concern mostly to the labor aristocracy and a few scattered capitalists stuck with portfolios in certain sectors that are uncompetitive. The labor aristocracy of one country may suffer at the expense of another depending on who trades with whom, and the protectionist capitalists are the ones likely to suffer a loss of "c" (fixed capital), in the typical functioning of capitalism where some "c" is always being destroyed.

"Despite all the talk about the 'globalization' of world business, most multinationals' performance is still closely tied to the competitiveness of its 'home' economy. In 1988, for example, U.S. parent operations accounted for 78 percent of the total assets, 70 percent of the total sales, and 74 percent of the total employment of U.S. multinationals. These shares were actually slightly higher than in 1977."(143) When it comes to the home base, national capital based in the United $tates continues to hold an advantage over other capitals in commodity-production and sales. As such there is still a basis for Amerika-first Buchanan-style politicians to rally non-monopoly capital and the labor aristocracy while wooing Amerikan monopoly capital. In most cases, Amerikan monopoly capital bound up with commodity production will reject the Buchanan/CP-USA call, but it may be more open to it than monopoly capitalists of small imperialist countries.

The disadvantages in competition that the U.$. have include some of the factors mentioned above as advantages. To "win" the Cold War, it got itself stuck in a pattern of high military spending which drains resources for competition in other areas. In addition, its beliefs in racial superiority may lead it to discount competitive pressure from Japan.

According to Pat Choate, the main or one of the main weaknesses of the U.$. competitive position is that the people engaged in trade negotiations here are so easily bribed, legally. In Japan there are very few corporate lawyers or accountants. In contrast, in the United $tates one lobbyist said, "'What we lobbyists want is something complex, time-consuming, and abstract. Our goal is to bill hours rather than craft a rational national policy. That's the job of government. We like the current structures and processes.'"(144) Choate admits that the United $tates also has lobbyists and spies abroad; although he does not admit that the CIA and NSA have always spent more money than the peanuts Choate is complaining about spent by Japan on lobbyists. What Choate is miffed about is a relative lack of patriotism of U.$. government officials which are more readily converted to the Japanese side. Supposedly trade negotiators were afraid to be tough with Japan, because they are protecting their chances of obtaining lucrative jobs later.

Another fact getting the Japan-bashing crowd going is the estimate that only 2 percent of foreign agents register with the government as they are supposed to.(145) To top it all off, the top officials selected by the president to negotiate trade deals for the United $tates turn out to have had jobs in the past lobbying for other countries. In fact, the top three trade officials named by President Bush--Carla Hills, Julius Katz and S. Linn Williams all had previous jobs lobbying for Japanese trade interests.(146)

As a result of such concerns, there has been a tightening of laws with regard to what jobs a trade negotiator can take after working for the U.$. government. President Clinton does not allow senior trade officials to take jobs with foreign interests after leaving their jobs.(147) On the other hand, there is no way to stop presidents themselves from accepting a $2 million gift from Japan after retirement as President Reagan did.(148) The image arises of a U.$. government completely incapable of negotiating its own trade deals. Cabinet official Robert Reich has put forward that it is impossible to separate out national capitals in commodity production anyway, and that such production is now globalized.

Other books not bashing Japan hold a weaker version of the same thesis based on the idea that the United $tates runs trade deficits for political reasons, and not because its government is unaware of its negotiating difficulties. During the Cold War, the United $tates was unwilling to push Europe or Japan to the wall over trade issues for fear that the Soviet social-imperialists would take advantage. It used to be leadership of the Cold War justifying trade deficits and now it's an ideological unwillingness to take up "managed trade" that is causing trade deficits by this line of reasoning.

Compared with Europe and Japan, the inordinate fear of socialism has led U.$. imperialists to turn a blind eye to scientific studies on trade. So-called "managed trade" has arisen naturally in international and inter-government discussions of commodity production and services trade. One aspect of managed trade is using the government to target certain sectors of the economy for support, because those sectors supposedly generate the "good jobs" and make a country well-off. Obviously that smacks of socialist planning, so that is out in the land of Anglo-Saxon individualism; although there will continue to be those, especially in the Clinton administration who try to sneak it in. Lloyd Bentsen is a notable victory for the new thinking of Commerce Department trade representative Clyde Prestowitz on trade that says the United $tates should acknowledge Japanese and European preferences for managed trade and just play by their rules instead of pushing for free market individualism.(149)

Another aspect of managed trade concerns tariffs and quota-setting. When government officials argue with each other about trade deficits, one side is bound to say that the other has a closed market and that's why there is a trade deficit. The other country's officials are bound to say the goods produced by the other country are inferior. Hence, in discussions amongst government officials, nationalism quickly arises and adds an erroneous subjective element to discussions. To get around each side's nationalism, there are appropriate statistics to examine and trade negotiators in capitalist countries now know this: "If my country's commodity X is so inferior, how come it has 30 percent of the market share in countries other than yours but only 2 percent in yours?" would be a typical argument. When two countries are bound to be nationalistic toward each other in trade negotiations, the recourse is to argue about other countries. Another trick is to simply change the label or name on the product. If the product is the same, but now it is sold saying "made in country X" instead of "made in country Y" and suddenly sales radically leap up in country X, we know that the issue is just nationalism, not product deficiencies. All around the world nationalism and so-called "non-tariff barriers to trade" exist--which does not surprise MIM, because MIM has said all along that real free trade and individualism are only possible under advanced stages of communism, after the elimination of countries. For now free trade is a utopia pursued by the bourgeoisie for hundreds of years, with a longer record of failure than socialism supposedly has since starting in 1917.

In any case, the U.$. government's extra anti-communist fear of economic planning places it at a disadvantage relative to Japan, Europe and state-capitalist China which are more willing to use planning for bourgeois ends. "In the economy that grew the fastest in Europe in the 1980s, that of Spain, government-owned firms produce at least half of the GDP. In France and Italy the state sector accounts for one-third of GNP." (150) Whether the United $tates can avoid taking up an "industrial policy" and "managed trade" if Europe and Japan decide to go forward is difficult to say. For ideological reasons, the United $tates may continue to put forward that the ownership of profits is what matters, not where the workers are employed. If foreign imperialists own a large share of the U.$. economy, such a position may not even hurt the labor aristocracy. On the other hand, the pattern of not caring about history and statistics in trade allows the U.$. administration the flexibility to change policy. U.$. practice has been to bring in a succession of know-nothings to head trade policy, as if to underscore that there is no science of trade. When one official threatened government subsidies to match Airbus subsidies in Europe, no one believed him, because of U.$. individualism.(151) However, a change of administration and faces could conceivably change that.

On the whole, MIT business professor Lester C. Thurow citing "too many vested interests" including the disproportionately high share of worthless "managers" or white-collar workers relative to other imperialists has correctly predicted it's unlikely for the United $tates to increase its savings rate, eliminate short-sightedness and its ideological fears and take up imperialist competitive challenges successfully. "There are few examples of nations rebuilding their economies and consciously accelerating their rate of growth of productivity without the sting of military defeat."(152)

Of particular concern to MIM in the United $tates is the possibility of a national socialist movement led wittingly or unwittingly by the likes of Pat Choate, the CP-USA and the social-democrats of the DSA ilk. Choate admits that the United $tates does all the things Japan does abroad and also admits that U.$. politicians can be bought by anyone, not just the Japanese. For this reason, he spends 99 percent of his time bashing Japan, and 1 percent of his time admitting the flaws of capitalism and U.$. imperialism in particular.(153) He claims to be in favor of removing all influence-peddling, not just Japan's. Under the pressure of Japanese competition, Choate even admits something we communists have been saying about imperialist investment for decades, except he applies it not to a colony but to the United $tates! "Of the 677,000 jobs that foreign investors claim to have created in 1988, only 34,000--a mere 5 percent--were created by the establishment of new foreign-owned operations in the United States. The other 95 percent were made up of existing jobs in U.S. companies that were taken over by foreign investors."(154) We want to know where was Choate all these years when that needed to be said about U.$. investment in the Third World.

As this is being written, there is a major furor in the press about Asian non-citizen contributions to the Clinton campaign of 1996. Much of the press coverage is so ignorant that it fails to distinguish between "Asian-Amerikans" and Asians living abroad. Sometimes the point seems to be that it was wrong for Clinton to take money not from whites. Other times, people realize once again the issue is one of foreign influence. The labor aristocracy is particularly jealous of its relationship with U.$. imperialists and does not like competition from foreigners. For this reason, a movement for nationalization of Japanese assets, managed trade and against foreign influences could easily take a national socialist direction in the United $tates. For this reason it is very important not to inflame economic nationalism, because it will be the communists that get burned, unless we believe that another inter-imperialist war would be a good thing. Instead, we should orient those seeking economic reforms to go in other directions that we will discuss later.

In reality, U.$. imperialism would have a crisis very quickly if it were not for the infusion of foreign capital. As explained above in "C 1," industrial capital in the United $tates is integrated with bank capital now thanks to debt and the interlocking of boards of directors so that most CEOs and Treasurers think more like bankers. The extra degree of bank-think is also U.$. imperialism's Achilles Heel in terms of competition, because by 1990, over 70 percent of after-tax profits went to dividend pay-outs in the United $tates, up from 44 percent in the 1960s. As William Lazonick and others have pointed out, Japan's industrial companies do not face that kind of pressure with regard to sources of funding for long-term investment.(155) Trade official Mike Smith of the Reagan era indicated his helplessness by saying the one thing he would want to boost competitiveness is to "abolish the quarterly stockholders' report."(156)

c. The European Union's global competitive position

Japan's emergence as the leader of accumulation aspects of imperialism is a major impetus to higher levels of cooperation amongst European imperialists. In the 1980s, Japan's banks in the world's top 50 surpassed Europe's banks in the world top 50 in assets. They had already been ahead of U.$. banks before 1980.(157) In addition, "Europe's largest companies surpassed America's in number and sales volume during the last half of the 1980s. By 1991, Europe had 168 of the largest 500."(158) Pushing for higher levels of European economic cooperation, Chancellor Helmut Kohl of West German said in February, 1990: "The 1990s will be the decade of the Europeans and not that of the Japanese."(159) With some political momentum on his side and the speculative bubble bursts of the 1990s that cost Japan $6 trillion in lost property value,(160) what Kohl was saying was not all empty talk.

The historic impetus to the European Union has been France and its partnership with Germany. Going back to 1950 and European coal and steel agreements, before the recent controversies over European monetary union, England has been the major European imperialist to seem to "go it alone," as in the ideology of individualism it shares with the United $tates. As early as 1957, Continental Europe had an organization to direct taxes, spending and expansion in coal and steel. That same year, the Europeans signed the important Treaty of Rome that produced the EEC (European Economic Communities). The EEC was a common market for freer movement of capital and people across borders with fewer tariffs. Today the EEC is simply referred to as the EC (European Community). (161)

Some may be surprised to learn that the United $tates also encouraged not just trans-Atlantic unity but also unity within Western Europe. It was always a concern of the United $tates that French nationalism would disrupt Europe and allow the Soviet Union a chance to divide the front against it. Bourgeois internationalist, George W. Ball, who was eventually Kennedy's undersecretary for economic affairs actually had a hidden office in French socialist headquarters. From 1945 on, he backed Jean Monnet who wanted European unity and not Charles de Gaulle's French nationalism.(162) Ball took a strong role in repelling the Amerika-first faction of the bourgeoisie during the Kennedy administration and contributed to the overall image of the State Department as full of bourgeois internationalists always putting trade concerns of domestic capital behind global goals of anti-communism or free trade ideology of U.$. monopoly capital.

In 1991, the countries of the European Communities (EC) adopted the Maastricht Treaty. In 1993, the treaty took effect. There are military and foreign policy aspects of the new European treaties, but the main aspect is economic. The treaties "provide for the creation of the European System of Central Banks (ESCB), with the European Central Bank (ECB) at its center, and the creation of a new currency, the ECU to replace the national currencies of the EC countries."(163) The ECU now exists, but it will not replace national currencies until 1999 at the earliest. There are two preparatory stages before the real fireworks begin, but the French with Italian prodding insured that at least some Europeans take the plunge together in 1999. The minimum number of countries affected would likely be Germany and one other, France and Denmark being likely candidates for preferred partners of Germany in 1999, unless Germany uses the statistical benchmarks it established as an excuse not to undertake monetary union. For example, members of the monetary union are not supposed to have a government budget deficit in excess of 3 percent of the country's Gross Domestic Product, which is its production of goods and services in a year. Also, no country is supposed to have a total government debt equal to higher than 60 percent of its GDP. In 1996, only Germany and Luxembourg met these two criteria alone and there are more criteria in the treaty. (164)

One thing we can say is that the revisionists and social-democrats in Europe stirring up economic nationalism are correct that the governments are cracking down on social spending in order to appease Germany for monetary union.(165) At this time, since Germany's central bank is the largest it also calls the shots in Europe to a greater degree than other banks, because each of these EC countries has decided to compete and not go it alone. Switzerland would be a case in point of not wanting to surrender sovereignty to Europe, partly for fear of losing competitiveness. The Swiss banks do not want to be regulated by the whims of other countries, because they attract business for their secrecy and tax policies.

European governments are now conducting intense propaganda for free trade and monetary union (EMU). Again and again the labor aristocracies are told that their success depends on international competitiveness. In particular, the concern of German and French capital is that if Europe does not unite or unites at the lowest common denominator of competitiveness it will still be unable to project itself internationally. For these same reasons the British capitalists are tempted into deepening economic relations with Amerikan capital instead of heading into European unity. On the other hand, in the vestigial reasoning of pre-integrated finance capital, the question arises as to what choices French and German capital have if not European unity. The French government has a web site in various languages listing the following advantages of EMU: 1) It's easier to develop common European policies with an underlying unit of measure for agriculture, fisheries and trade. 2) The open borders for capital movement since 1990 have increased speculation against currencies. 3) Countries have incentives to devalue their currencies for competitive purposes. 4) Having one central bank makes it easier to coordinate monetary policies. 5) Investors do not have to push up their interest rates to make up for potential currency exchange losses. 6) Europe will be able to continue to negotiate with Japan and the United $tates on trade and monetary issues by being a large enough unit impossible to ignore.(166) (See Japan's jokes about "G-2" for instance.)

As it is, the imperialists are not guaranteed to be able to pull off the European Union with a united European currency. To form the greatest Mafia family of all time, the thieves maintain some illusions about each imperialist shouldering an equal burden of carrying the European unity. Hence, each imperialist is to crackdown on its labor aristocracy equally and have an equal share of a budget deficit and similar percentage of the economy in government expenditures as well as similar targets for inflation and currency values. Already many of the major countries targeted for the Euro currency are missing the targets. In fact, in 1995 not one country in Europe qualified by all the statistical measures set up in the treaty for monetary union.(167) Thus, Germany has adopted a tough bargaining position by appearing to be willing to do without the EMU. In 1998, the decisions about which countries will be invited to join the EMU will start.

No thief is going public about this yet, but as the deadlines roll around the question arises, will some of the bigger thieves subsidize the more troubled thief operations to form the European Union free trade organization with one currency? Will they water down their guidelines for EMU in 1999? Already there is development assistance within the European Union. It doubled in 1988 with the "Delors Package." How far will the Germans and other lead imperialists be willing to go to finance the other European countries to catch-up and be strong contributors to a competitive bloc? Loukas Tsoukalis put German desire to get together a competitive machine this way: "The Community's 'paymaster' was apparently ready to dig into the pockets of its taxpayers in order to pay for the necessary lubricant for the smooth functioning of the Community's engine."(168) So far they have succeeded in speeding up the growth of Ireland, Spain and Portugal.(169) The transfers from the EU to Greece and Portugal are 3 percent of their Gross National Product (GNP) and 2 percent of the GNPs for Ireland and Spain. The amount is even more significant as a fraction of the investment of those countries.(170)

Despite the initial weaknesses of its bloc, the Germans may also be pleased with one immediate result of monetary union: the new currency will strengthen relative to the dollar on its own, because more countries will accept it as a medium of international exchange and the public at-large will be willing to hold ECU for international trade. This will result in a devaluation of the dollar. Already the German mark is seeing some of this effect since the Maastricht treaty was signed.(171) The result will be a decline in U.$. purchasing power but an improvement in the U.$. trade balance. We suspect that the United $tates at least under a Clinton administration would applaud this result as it believed its currency was overvalued.

Will the United $tates attempt speculation to sabotage the higher stages of integration of the EC? What about Japan? If Japan or the United $tates does sabotage the EC, will the EC retaliate by closing up formerly open economic borders? In other words, are the imperialists already sufficiently interweaved to allow the creation of an EC and maybe even allow U.$. entry into the EC? If the idea of an economically united Europe suffers crushing and decisive blows in the upcoming years, we can expect that to generate severe pressure for inter-imperialist war down the road, because there will be many recriminations if the EC blows up, and a change of strategy by some imperialists smarting from exclusion from superprofits. On the other hand, if the EC does form an even more united economy, we will see a huge push to world government and accelerated war against the Third World.

Having integrated the interests of the European ruling classes, it will be that much easier for them to deal with other imperialists and cut down on the cacophony when it comes to dealing with the Third World. For this reason, MIM takes the stand it does on opposing instigating inter-imperialist rivalry, but there needs to be conferences to see if there is a consensus in the international communist movement of the Third World that MIM needs to be heeding. We do not believe we will run out of possibilities for playing off imperialists if we "let" the European Union go through; however, we believe the preponderance of the world's communists are in the Third World, and they should have a vote on how we try to shape inter-imperialist contention. We have the duty to also accurately represent that there are not many choices other than 1) struggling within the bourgeois internationalist framework and possibly playing off imperialists later 2) allying with reactionary non-monopoly capital and the labor aristocracy for economic nationalism as a tail on the dog.

In the contradictions that the major European imperialists face in forming a unified currency, one is that England gets to vote on major matters of the organization. Since England is dominated by multinational corporations more than other major imperialist countries, we can see an underlying material basis for England's ambivalence toward the European Union. The "United Kingdom" has 45 percent of the EU's investments from countries outside the EU.(172) Thus, it is not as European-oriented as the other European countries. In 1987, only 33.2 percent of "United Kingdom" foreign direct investment assets were in Western Europe. 45.1 percent were in North America.(173) The United Kingdom would seem not to want to do anything that would jeopardize its access to other markets, especially in North America. The Tory backbenchers as they were called griped about moves toward European Union, and the basis is in a free market individualism that sees England in a totally global or totally national position, not a European position.

Despite the global position of England, Margaret Thatcher lost her job only for opposing the European Union too much for the taste of bourgeois internationalists. The Tory Party will have to be presented with a fait accompli by the rest of Europe and then England will have to decide whether or not to exercise its opt-out clause if it is invited to join the monetary union. The election losses of the Tories in 1997 may point to a greater ease of European monetary union.

When the French government criticized "Anglo-Saxon" speculators for devaluing the French currency, it had a good case to make. There was no reason for speculators to attack the French currency during the stages leading up to EMU, but they did anyway. France also has a gripe in that Britain and Luxembourg did not want their banks constrained by an EU tax on investment income. They were afraid of losing out in competition to Switzerland, which is not a member of the EC and does not even partake in very limited trading blocs. There are also Andorra, the Channel Islands and Liechtenstein to worry about as competitors.(174) These days banks set themselves up on small islands to avoid political regulations. Looking toward the future, France is the country that is styling a notion of European monopoly capital. A recent trend is for monopoly corporations of individual countries to ally with one or two other monopoly companies in other countries to fund research and development that is too expensive for any one country. Then the "alliance" of the companies has a competitive advantage over the other monopoly companies of the world. France wants to see the "alliances" form amongst European monopoly capitalists. A victory for European monopoly capitalism was the formation of "Airbus," which was designed to compete with Boeing in aircraft production and created from scratch by the European governments. On the other hand, according to Loukas Tsoukalis, the French predilection for European alliances will not succeed, because the companies want Japanese investment and technology and the U.$. market. Thus, the EU will serve only as a stepping stone to global competition.

The Germans appear most concerned that they may be dragged down to a lower level of competitiveness by the rest of Europe. They have made it clear that they want their policies to dominate and they are willing to pay to some extent for others to go along with a brisk posture toward global competition. Germany has been allowed to keep its policy ideas while being forced to cough up cash for development purposes by Spain for itself and the other poorer European countries--Portugal and Greece. The money used to catch up some countries with the rest of Europe is called a "cohesion fund."(175) Although the conditions of the imperialist countries have nothing to do with the assumptions of bourgeois neo-classical economics, sometimes the imperialists have no other ideology to use, and so the reasoning of Germany and Spain is that competition, free trade and monetary union should lead to efficiency gains, but some of those gains should be paid to the "losers" to maintain overall participation in the system.

Although Germany is not in a position to adopt England's quasi-international stance and has more reason to gravitate toward Europe, it still has a central bank that would prefer to run Europe on its terms.(176) To bring German central bankers to heal, the French pulled out one of their IOUs. After World War II, Germany was split into U.$., French, British and Soviet occupation zones. The French thus had a veto over German unification. In exchange for letting W. Germany reunite with E. Germany, the Germans had to show appropriate contrition to the French and not appear as a threat of European war. In the end, Germans in the words of Chancellor Kohl made concessions for EMU "as a matter 'of war and peace in the 21st century.'"(177) For the younger readers, this statement may seem to be out of nowhere, but if we read Lenin's book "Imperialism: The Highest Stage of Capitalism" we will understand how the ruling class links its business circles to its war circles. The half-way intelligent bourgeois no longer attempts to deny the connection between trade blocs and war, with war as a means of conducting business by other means.

A hard look at Europe's trade position underscores the German concern about competitiveness. Many commentators on European foreign trade miss that most of it occurs within a region smaller than the United $tates. The foreign trade statistics make Europe seem more competitive than it is, because after all it is buying other countries' goods and selling to other countries as well. If we treat the European Union as if it were a giant United $tates, then Europe's share of global exports is still impressive at 20 percent,(178) but imports shrinks from 43 percent to 12 percent, because most of its imports are from one European country to another. On a per-capita basis, Europe only imports one-quarter as much from Asia as the United $tates does.(179) Hence, it appears that Europe is not really ready for competition from imports and global trade the way the United $tates is and already the United $tates looks like a mess of government and trade deficits from the competition, so where does that leave Europe?

d. The other imperialists

The only other major imperialist to try to change the rules of the game to play by rules favorable to itself has also given up the game: we speak of the ex-Soviet social-imperialists. We can quite fairly say that the imperialists are vainly racing to make Kautsky's theory come true and they are taking full advantage of this lull period in which the Soviet bloc dissolved and ended the most severe national conflict amongst imperialisms.

Facts contrary to Kautsky's theory continue to be that national conflict continues unabated and hence bloody imperialist wars continue to take millions of lives around the globe. Furthermore, it is not a matter of super-imperialist policy so much as a process of class struggle ending colonialism and the breakdown of the social- imperialist bloc that gives the bourgeois internationalists a chance, a historical coincidence of events that makes super-imperialism appear more plausible to the bourgeoisie.

Concretely-speaking, Chinese social-imperialism and Russian imperialism are waiting in the wings, biding their time by focusing on their economies, largely by not antagonizing the other major imperialists to the point of endangering business. These two are the most obvious long-run threats to WTO/UN/IMF/World Bank super-imperialism. The Greek comrades have correctly pointed to India, Iraq and Iran as other material for an alliance of challenge to imperialism's New World Order. An imperialist bloc of Russia, Japan, China and India or some combination of these would be very threatening to Western imperialism. Currently, the disadvantages these countries have is that none is willing to serve as a market of last resort for the others. Thus, GATT will undercut their unity.

China in particular continues to fix its currency relative to others and so retains some independence of action.(180) It has integrated itself into the imperialist world economy, but more along the lines of the rules for imperialism earlier in the century where business deals are settled on a case-by-case basis with respect to overall imperialist plans. If China rises in economic strength it remains to be seen if it will join the imperialist world government. So far the United $tates won't let China join the World Trade Organization. For now, China raises no strenuous objections and "lies low" as the politicians there say. The U.S. ruling class recognizes that "China and the United States together account for almost 16 percent of global trade and 30 percent of global output."(181) When it comes to politics and "human-rights," the U.$. ruling class plays bad cop, and Europe the good cop, but when it comes to trade, the roles are reversed. The carrots offered to China are considerably better than those offered to Russia these days.

The situation of Russian imperialism is embarrassing to its former competitors and it is another major impetus to the European Union's higher levels of cooperation. The collapse of Soviet social-imperialism left a vacuum in Eastern Europe and ancient ethnic rivalries asserted themselves again. Aside from having the nervous situation of war so close to home, the major European imperialist powers also would like to avoid allowing immigrants from war-torn societies. For this reason, North Africa and Eastern Europe are slated for long-run integration into the European Union, but it is a very controversial question of when and to what degree integration will occur.

As we are writing this in July 1997, the North Atlantic Treaty Organization (NATO) created to "protect" Western imperialism from Soviet social-imperialism has accepted new members from Eastern Europe. Immediately though, France sought to weaken the blow to Russian imperialism by saying it would not pay for new NATO memberships and the U.S. Government said it did not want to rush into letting in too many new members.

The Communist Party of Greece (Marxist-Leninist) has correctly pointed out a number of things about Russian imperialism, including its own desperate internal situation and the great possibility of change. Russian imperialism has lost its access to the Baltic Sea. It has also moved the front-line of potential battle much closer to Russia in Eastern Europe. "We think the fate of these countries (unless some other overturning happens) is to be squeezed between the West and Russia."

It is in Russian imperialism where we see the whole gamut of conditions. On the whole, the Russian workers are now super-exploited. Their life-expectancy was already falling under the state-capitalist Soviet regime, but since the restoration of free-market capitalism, life-expectancy for men has plunged another 8 years, so that men now only expect to live to 57. Such a life-expectancy is one of the surest signs of super-exploitation in which wages and work conditions are not enough to sustain healthful life.

In conclusion, Russian imperialism and Chinese social-imperialism are the greatest wildcards, but for now they are focussed on internal economics and do not seek to challenge the preponderance of the imperialist system. The U.$. imperialists alternate between polite public responses to China and dictation of terms. "Both China and Russia are currently negotiating accession to the WTO. Their successful integration into the multilateral trading system requires that they continue their market reforms, agree to provide mutually beneficial access to their markets, and abide by multilateral rules and obligations. Likewise, by keeping open our markets and those of our traditional allies to these new economic powers, we can increase the stake they have in maintaining the international rules-based economic system."(182)

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