Impact of War and Occupation
Post is a member of the National Committee of the US socialist organisation
Solidarity and co-author of the pamphlet Beating Back the Corporate Attack:
Socialism and the Struggle for Global Justice.
WE CHANT "No Blood for Oil," most of us who have been organizing
against the war the past few months reject the Bush administration’s claims
that the war was about "weapons of mass destruction" or
understand that this war is about the control of the oil resources of the Middle
East--about establishing U.S. imperialist domination of the region. We are clear
that corporations with close links to the Bush administration, like Halliburton
and Bechtel, will reap huge economic benefits of this war.
is not clear is the actual impact the war and occupation of Iraq will have on
the U.S. economy as a whole. While some U.S. corporations may do quite well, the
war and occupation may further undermine overall profitability and accumulation
in this country and the rest of the capitalist world.
economic contradictions of the U.S. war and occupation of Iraq help us
understand much of the divisions within the capitalist class, in this country
and globally, over this war. The hesitation of some Democrats, The New York
Times and other representatives of U.S. capital to support Bush's preemptive,
unilateral conquest of Iraq reflects their unease about the risks and costs,
both economically and politically, of the war and occupation.
fears, and French and Russian commercial interests in Iraq, have also fueled the
European capitalist opposition. The gap between what the Bush administration
wants and what it might get has led to sharp divisions within the U.S. ruling
class, and between the U.S. and European imperialists. Let's examine why.
Economy in Context
order to assess the economic impact of the war and occupation on U.S. and world
capitalism, we need to understand the current economic situation. Most left and
radical economists argue that stock market speculation and exchange rate
manipulation fueled the economic expansion of the 1990s.
article argues a different position, that the economic expansion of the last
decade is part of a long wave of capitalist expansion that began in the early
1980s. Over the past two decades, corporations in the United States have
radically reorganized the production and goods and services.
a result, the long term rate and mass of profit in U.S. capitalism began to rise
in the mid 1980s. The result has been over twenty years of growth, which has
fueled both a resurgence of U.S. industrial competitiveness and two short cycles
of capitalist expansion (1983-1989, 1991-2000).
today the U.S. and indeed the global capitalist economy are in the midst of a
severe recession. It is not clear, however, whether this recession marks a
change in the long-term economic trends that began in the early 1980s.
the one hand, the recession could simply be a short-term, cyclical downturn in a
long wave of capitalist expansion. Like the recession of the late 1980s and
early 1990s, this recession might be relatively brief and could herald a new
cycle of strong growth.
the other hand, the recession could mark the beginning of a new long wave of
capitalist stagnation, like the one that gripped the capitalist world from the
mid 1960s through the early 1980s.
profitability stagnates or falls as the result of growing capitalization of
production, which shows up as excess productive capacity--too many machines,
equipment and buildings--in such key industries as telecommunications, transport
and manufacturing. If profitability is beginning a long-term fall, the current
recession will be lengthy and any recovery will be relatively brief and weak.
either case, the war and occupation of Iraq could undermine the conditions that
fueled capitalist growth since the early 1980s, accentuating either a long-term
or short-term downturn in capitalist accumulation.
basis of the long wave of capitalist expansion that began in the mid-1980s has
been the spread of "lean production" methods across the U.S. and
are two key elements to lean production. The first is there organization of work
in factories, stores, offices and schools. This reorganization of work has taken
many forms: speedup, fragmentation of tasks, two-tier wage structures,
outsourcing work previously done by unionized workers, use of temporary and
part-time workers, increased management flexibility in setting hours and
tasks, and cracking down on absenteeism while eliminating replacements for
workers who are absent or retire.
these measures have resulted in fewer workers producing more goods and services
at lower wages. The reorganization of work along the lines of lean production
has raised the rate of exploitation (the ratio of profits to wages) of workers,
increasing the amount of unpaid, surplus labor workers perform for capitalists.
second element of lean production has been the reorganization of the capitalist
firm. For the past twenty years, we have seen U.S. and other capitalist
corporations engage in waves of downsizing, mergers and acquisitions,
bankruptcies and” spinning-off" of unprofitable (or simply less
profitable)operations. The result has been widespread destruction or "devalorization"
of less efficient and less profitable capitalist firms.
rate of profit, the driving force of economic growth under capitalism, is the
total profits derived from the exploitation of workers divided by total capital
invested in plant and equipment. Lean production's reorganization of work has
simultaneously increased the rate of exploitation and decreased total capital
invested in plant and equipment, raising the rate of profit and spurring the
economic growth of the 1980s and 1990s.
capitalist government policies have aided and abetted the spread of lean
production across the U.S. and world economy since 1980. Whether Democrats
or Republicans are in office in the United States (or social-democrats or
conservatives in Europe), capitalist governments across the world have pursued
the same policies for over twenty years.
state policy has three key components. The first is global "free
trade." As most of us know, the goal of the WTO, NAFTA, GATT, FTAA and the
like is not simply to remove tariff barriers to the free movement of finished
goods across national boundaries. More importantly, "free trade" means
removing any and all legal and political obstacles to the free movement of
transnational corporate investment.
environmental and labor protections, forcing governments to privatize publicly
owned industries and services, and similar measures have helped create a world
where U.S., European and Japanese transnational corporations can seek out the
most profitable investments and create global production chains that link part
suppliers in the "global south" to assembly plants in the” global
second component of neoliberalism is the deregulation of the labor market.
Across the capitalist world governments have moved to cutback or abolish social
welfare, and to eliminate laws that restrict the ability of employers to hire
and fire workers at will.
aims of these policies are simple--increase the number of workers in the
labor-market, increase competition for employment and maximize employer
"flexibility" in hiring and firing. The result has been a downward
spiral of wages, benefits and working conditions.
third component is permanent fiscal austerity. Capitalist governments in Europe,
the United States and Japan struggled successfully in the 1990s to close or
eliminate state budget deficits, in order to limit or eliminate inflation.
is a problem because it allows some capitalist firms to survive the competitive
battle in the market place by taking advantage of short-term fluctuations in the
costs of inputs and the price of outputs. Limiting inflation disciplines
capitalists by making the reorganization of work along the lines of lean
production the only way for corporations to compete successfully in the domestic
and global market.
can see the social costs of lean production and neoliberalism all around us in
falling living standards and growing inequality, within the industrialized
capitalist countries and between the imperialist "centers" and the
less industrialized "periphery."
in all parts of the world have experienced falling wages and are working longer
and harder just to keep up. The meager social safety nets that existed in most
capitalist countries are being dismantled, leaving individual families solely
responsible for their survival in an increasingly competitive, dog-eat-dog
"war of all against all" that lean production intensifies creates
tremendous insecurity, which is a fertile ground for the growth of all sorts of
social problems. Intensified competition for jobs, wages, housing, health care
and the like is also a fertile ground for various forms of racism, immigrant
bashing, sexism and homophobia, as each group of working people attempts to
maintain their slipping social and economic position at the expense of other
we become hardened to widespread suffering here at home, we are more easily
manipulated into supporting foreign policy adventures--bombings, economic
sanctions--that spread the suffering around the world.
U.S. Capital Wants
U.S. war and occupation of Iraq are in some ways a logical outcome of the
lean-and-neoliberal world of the past twenty years. U.S. war objectives include
not simply control of Iraqi oil resources, but the political reorganization of
the Middle East and Persian Gulf regions.
stated U.S. desire to use the war to help "promote democracy” is really
the goal of establishing regimes on the neoliberal model, hoping to remove
obstacles to transnational corporations, deregulate labor markets and impose
fiscal austerity. In the minds of Bush and his closest advisors, the
"liberation of Iraq" is just the first step to remolding the world in
the U.S. rulers' vision.
U.S. policy makers hope for, and what they may get, from the war and occupation
may be two very different things. While their war objectives are consistent with
the spread of neoliberalism and lean production, the actual effects of the U.S.
war and occupation may actually undermine stability and profit.
The Bush administration has chosen to launch this war in the face of growing
U.S. budget deficits. The "war on terrorism" will only exacerbate
budget deficits fueled by the current recession and the Bush administration's
tax cuts for corporations and wealthy individuals.
renewed fiscal crisis of the state is being felt not only at the federal level,
but in American states and municipalities, which are cutting social services to
fund "homeland security." The huge costs of the U.S. occupation of
Iraq--tens of billions for even a relatively brief occupation of six
months--will place further strains on federal and state budgets.
Growing budget deficits bring the danger of inflation. Capitalist policy makers
(as indicated above) fear inflation because it creates the possibility of
companies remaining competitive by taking advantage of market fluctuations,
rather than ruthlessly reorganizing work and shutting down unprofitable
Bush administration has been silent on how they plan to pay for the war and
occupation, ruling out any increase in taxes. Cuts in U.S. social
services--already among the paltriest in the industrial world--will not be
sufficient to rebalance the budget.
The easiest solution is to grab Iraqi oil resources to cover the costs of the
war and occupation and close the U.S. budget deficit. Hence exclusive US control
over the production and sale of Iraqi oil looms as a necessity, not an option
for U.S. policy makers.
exclusive U.S. control over Iraqi oil production might reduce domestic budget
deficits, but can only heighten rivalries with other industrialized capitalist
powers. Much of French and Russian opposition to the unilateral U.S. war against
Iraq is rooted in French and Russian investments in the Iraqi oil industry
underside Hussein's regime.
U.S. seizure of Iraq's oil fields and the use of oil revenues to close the U.S.
budget deficit would mean excluding new (and possibly expropriating old) French
and Russian investments in Iraq.
of Trade War?
non-U.S. (and possibly British) transnationals from investing in Iraq could
spark a "trade war"--attempts to exclude transnationals from investing
in other parts of the world. The threat of such economic retaliation stands
behind the recent French and Russian announcements that they would veto any UN
resolution allowing U.S.-British administration of occupied Iraq.
simply, to shore up one pillar of neoliberalism, fiscal austerity, U.S. policy
may undermine the other pillar, the free movement of transnational capital
across national border. While such renewed inter-imperialist rivalries are not
likely to lead to military confrontations among the major capitalist
powers--especially inasmuch as the United States remains the only military
superpower--renewed protectionism could severely undermine global capitalist
potentially destabilizing economic effects of the war and occupation means that
the war and occupation of Iraq will produce intensified attacks on working
people here at home. To balance the war budget, social services will continue to
compensate for falling profits and increased global competition, U.S. employers
will continue their attacks on workers, both organized and unorganized. Racism,
a mainstay for building support for imperialist and capitalist powers' military
adventures abroad for two centuries, will grow as different groups of workers
attempt, in vain, to defend their working conditions and wages against other
groups of workers at home and abroad.
close connection between the ongoing "war against terrorism” abroad and
declining living and working conditions at home provide both opportunities and
dangers. The links between the wars at home and abroad, already well developed
by anti-racist and global justice activists, must be high on the anti-war
about this: When Stephen Lewis, who heads up the United Nations task force on
the AIDS crisis, was asked if the $15 billion pledged by George Bush would make
a difference, he replied that this amount of money per year, for five years,
could actually defeat the epidemic now sweeping through Africa and threatening
Asia and Eastern Europe.
would be $75 billion--the amount that Bush has earmarked as the first down
payment for the conquest and occupation of Iraq!
these links means much more than simply including slogans against racism, budget
cuts and union busting. Anti-war activists need to find ways to support
struggles for economic and social justice that will develop in our cities and
communities, even if those struggles do not take an explicit anti-war stance.
Finding ways to support struggles against repression, harassment of immigrants,
union busting and social service cutbacks needs to become an important element
of anti-war organizing.
this is a necessary part of the anti-war movement making itself a movement of
the majority at home--of working people, people of color and other oppressed
groups. Making these links is also central to fighting racism. Indeed, if our
movement cannot make the links, right-wing forces can use popular economic
deprivation to advance their own pro-war, racist and immigrant bashing agendas.