Jack Rasmus

Capitalism is by nature based on intense, and often destructive, competition. Not only between capital and labor, but between capitalists themselves. But not all competition is the same. There is competition when the global economic pie is growing; and there is competition when it is stagnating or declining. And in recent months signs are growing that new forms of more intense, aggressive inter-capitalist competition are emerging as the global economy continues to slow in general, and even stagnant and slide into recession in a growing number of countries.

Competition in ‘good’ times of steady economic growth occurs within certain generally accepted rules of capitalist competitive behavior: permitted, and even expected, are inter-capitalist competition over who can cut costs and prices the most or fastest to grab another capitalist’s market share, who can get a bigger investment foothold in their competitor’s home market, or get a competitive product faster to market, who can leverage new production technologies faster, or who can get one’s government to provide a better tax cut, better manipulate free trade to open up foreign direct investment into another capitalist’s local economy, and so on.

Governments always have played a key role in the inter-capitalist competition game. But the forms of assistance that governments undertake in support of the competition game also can change over time: manipulating domestic tax policy, lowering interest rates, cutting benefits costs, and assisting companies in holding down wage gains, are all typical measures governments employ on behalf of their home-grown capitalists (and electoral campaign contributors) in ‘good’ times. Such measures represent enhancing capitalists’ competitive positions at the expense of their domestic working class, consumers, and/or wage earning taxpayers. But there are still other potential measures, ways for ‘taking away’ shares of income not only from workers but from other capitalists outside the home market, i.e. in other countries and economies.

As the ‘good’ times have transitioned to ‘bad’ in recent decades, and especially since 2008, the rules of the competition game have been changing—not only with regard to ‘taking away’ income from workers and consumers, but from gaining income at the expense of foreign capitalist competitors.
When the rules of the competition game between capitalists break down altogether, the result is war—i.e. the ultimate form of inter-capitalist competition. The two World Wars of the 20th century immediately come to mind. The fight for colonies and resources was particularly obvious in the case of the First World War, while the Second War was the consequence of unresolved issues left over from the First World War, as well as the consequence of the economic collapse of global capitalism in the 1920s and 1930s.

More recent and on-going, USA led wars in the middle east this century are also testimony of the periodic resort to war and military conflict on behalf of national capitalists interest. The Middle East wars starting in 1990 and intensifying in the early 21st century, have been fundamentally about ensuring resource availability to USA and the other advanced economies, especially oil.

Memoirs of key members of the US economic elite after the 2003 invasion of Iraq have admitted that the Iraq invasion was fundamentally about oil—even if that acknowledgement by US politicians and the press still has not been forthcoming.

More contemporary still, there’s the USA direct intervention to pull off a coup d’etat in the Ukraine last year, and then subsequently the setting up of USA neocon-cum-shadow bankers to run that country’s economy that took place last December 2014.

Competition by war may be forbidden within and between the advanced economies, but Ukraine is viewed as an acceptable ‘border conflict’ outside the ‘no military economic competition zone’, at least to the USA. To the Europeans, on the other hand, the Ukraine is viewed as more internal to the zone. Hence, they are more nervous about the conflict.

The related case of Russia is even more interesting. The Europeans are more nervous than the USA about the new ‘rules of the competitive game’ in the case of Russia. Those new rules mean severe economic sanctions to undermine Russia’s economy. Strongly favored by the USA, for Europeans economic sanctions are considered risky. Not only because of the reverse impact those sanctions are having on their European economies, but also because of the potential precedent setting they represent. If Russia is within the ‘no military competition’ zone, as many Europeans see it, then to economically compete with Russia by means of sanctions is a dangerous precedent. Like competitive devaluations, economic sanctions can cut both ways. Both competitors can resort to the same, and neither typically prevails in the end economically.

Furthermore, where do sanctions stop? What if Greece refuses to abide by the European Troika’s demands for a new debt agreement? What if Greece unilaterally leaves the Eurozone? Are economic sanctions against Greece a proper response to force them to pay up the $270 billion Greece owes the Eurozone bankers and governments should Greece leave?

Recent wars in the Middle East, Ukraine, and elsewhere have not involved military conflicts between the advanced economies of North America, Europe and Japan. Instead, what they represent is the advanced economies beating up on local emerging market capitalists and their governments, as the former maneuver to secure key interests on behalf of their respective capitalist classes at the direct economic expense of those emerging markets.

Obviously, inter-capitalist competition by means of military conflict between the advanced economies (USA, Europe, Japan) is not on the global agenda today. Not even close. It is reserved for those countries and economies outside the advanced economies’ orbit. But the rules of the competitive game within and between capitalists in the advanced economies, rules that that were in effect in previous years, also appear to be fading.

New rules are emerging. More accurately, the old rules are breaking down over what’s ‘off limits’ in terms of acceptable forms of inter-capitalist competition within and between the advanced economies. The advanced capitalist economies are thus entering a stage—a kind of competitive ‘no man’s land’—where new and more aggressive forms of competition between them are emerging.

In between the one extreme of government intervention on behalf of home-grown capitalist interests in the form of direct military conflict—and the other of advanced economy governments engaging in normal competitive measures (such as domestic tax, trade, monetary, and wage policies on behalf of their respective capitalist interests)—lay a ‘middle ground’ in which new forms of inter-capitalist competition that are more confrontational are emerging, but which are yet short of direct violence and war. Not the ‘normal’ forms of competition based on trade, technology, cost reduction, etc., and not yet military confrontation to secure economic interests, but something in between in terms of intensity and aggressiveness.

Some of the more obvious forms of this new, more aggressive, intensifying capitalist competition include the following:

· The USA government going after the European banks by levying and extracting multi-billion dollar fines and by introducing measures making it more costly for Euro banks to do business in the USA market—both measures of which are undertaken in order to boost the poor economic performance of US commercial banks.

· The European governments, in a tit-for-tat response, going after USA tech companies, requiring multi-billion dollar equivalent payments in taxes, levying fines, demanding organization divestment and break ups of the US companies in Europe, in an effort to make their own European tech companies more competitive with USA tech giants like Google, Microsoft, and others.

· The eruption of the global fight between the US shale gas/oil producers and the OPEC oil producers, led by Saudi Arabia and its neighbor oil emirates.

· The massive Quantitative Easing (QE) programs introduced by Japan in 2013 and 2014, and the Eurozone’s imminent QE in 2015—both programs of which designed to gain exports at the direct expense of other capitalist economies (including each other) and to stimulate capital inflows from other economies into their own to boost their stock and bond markets, make up for failing Euro bank lending, and promote foreign direct investment into Europe from Asia, China, and emerging markets.

· The increasing use of economic sanctions as a means to drive competitors out of targeted regional markets, and open up the same to one’s own capitalist producers

(For more details on the rivalries, read the rest of this article on the author’s website, at:
http://www.kyklosproductions.com/articles.html)