Tuesday, February 5, 2013

The Economics of Empire

More than four years have passed since the collapse of the world’s financial system.  A crippling economic recession lingers as economic growth continues to be anemic as the economy fluctuates between expansion and contraction.  Yet, stock markets in the US and the UK approach their all-time records with regard to their valuation.

Welcome to the economics of empire.

Previously, the increase in material wealth that came about due to the territorial expansion of imperialism enriched those at the centre of the empire.  Some of this wealth would then trickle down to the population at large.  This was the case in America after the end of the Second World War until the end of the 1970s with the election of Ronald Reagan as President and the ensuing death of the Fordist social contract between business, labour, and government.

For most of America’s history, nation building and empire building went hand in hand, so much so that before the onset of the twentieth century the two forces were indistinguishable.

But things changed.
For the most part, vast numbers of the people inhabiting the United States of America have become victim to the unparalleled success of the American Empire.

Grand Central Station New York
To get a feel for how the paths of the nation and the empire have diverged take a look at how New York’s Grand Central Station and Detroit's Michigan Central Station have fared.  Both were built in the grandiose neo-classical architectural style of the period, but while one continues to be the hub of a dynamic cosmopolitan city, the other lies in ruins.
Michigan Central Station Detroit


Today, New York is in fact the financial capital of the global economy spawned by the American Empire.  Detroit, on the other hand, symbolizes the decay of American industry and the American manufacturing sector in a nation that no longer attracts the necessary investments of capital to keep the American economy humming.
Essentially, American-born corporations and those who run them have turned their backs on their homeland because the returns on investments are greater elsewhere in the global economy.
The truth of the matter is that the American investor class is in the process of reducing its own population to a client-state status.  Having pushed the boundaries of empire beyond the limits of geography (total hegemonic domination of the world's military, commercial, and cultural spheres), the proponents of the American Empire have liberated themselves from the social ties that bind them to the nation.
They have, in effect, seceded from the union to pursue the expansion of commercial trade and the accumulation of capital in the virtual matrix of a global economy that runs on an operating system incorporating the rules written by America's elite.
In this matrix, GDP stats emerge but no longer represent significant data for those who no longer live and toil in the real economy.

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