How the superpower is seeking to be a business location Ruthless Criticism

Translated from GegenStandpunkt 3-1995

How the superpower is seeking to be a business location

A. A new strategy for the USA

1. New priorities, new situations, new obligations

The USA has discovered the need to rearm in economic matters. US policymakers have put economic success at the top of their list of national priorities – and are even claiming that national security is at stake[1]: The USA is no longer threatened by enemies of the system who are armed to the teeth, but by capitalistically powerful friends of the system. This view of things may seem rather exaggerated. However, this conflation shows, firstly, how deeply Americans care about this issue and how determined they are to bring about lasting improvements. Secondly, it makes it clear that they cannot imagine living among equals, let alone superiors, because national security can only be guaranteed if their position as the world’s superpower is secure. Thirdly, it identifies the demands and dangers of the “post-Cold War era”: If the USA does not succeed in regaining economic supremacy, then its status will be completely uncertain anyway. The USA must now use its still-existing extraordinary power to perfect this power in every respect. And its competitors should be under no illusions, because it is going to act with unprecedented toughness.

a) The state as trade representative of American capital

But the question is: toughness on what? What is the content of this new strategy going to be? American commentators are impressed by the “seismic shift in the power structure in Washington” – new leaders, new powers, new presidential preferences, etc. This is hardly surprising, given that the State Department has been ordered to reassess its priorities, and in two ways. On the one hand, this institution representing and enforcing American interests all over the world should no longer see its “classic tasks,” i.e. phrases and means of intervention such as “arms control,” “human rights,” “democracy and stability,” as the only decisive ones; it even says that a certain devaluation has occurred, and that America can no longer influence friend and foe in the usual ways. On the other hand, a redefined State Department does indeed have a counterweight to offer; it is also being upgraded if it is now being designated as the main conveyor of this new strategy. Secretary of State Warren Christopher is committed to this change in direction:

“For a long time, American Secretaries of State considered the economy to be a lower level policy issue. But you will hear no apologies from me as I now place the economy at the top of our foreign policy agenda."

The State Department’s new central task is to help American companies achieve success on the world’s markets. America is sending its top diplomats around the world as “salesmen”[2] based on an analysis of the situation which says: it is losing its presence on the world’s markets. However, this is by no means combined with an introspective doubt as to whether these companies might be inferior to their competitors in terms of price and quality, delivery punctuality and service. “Marketability” and “competitiveness” are not government battle cries for cost cutting, rationalization, “innovation” and the like, which are to then result in superior commodities; nor is the state announcing a subsidy program to boost competitiveness on the side of productivity. The US state is not thinking about promoting its “domestic” economy, as that would seem un-American, i.e. a state distortion of competition.[3] It assumes that the US economy is competitive in every respect. Rather, US policymakers regard American capital’s loss of presence on the world market as their own failure: the state has not done enough for “its” companies around the world; it has not – according to the tautological opposite of a lost presence – pointed out the existence of its companies emphatically enough.[4] The serene belief that the USA possesses a globally compelling weapon in its capital has certainly been shaken; this, however, is to be made up for by its vast foreign policy apparatus being put at the service of its economy and acting as its overall international lobbyist[5]:

“Promoting exports has become one of the main concerns of US trade policy. This policy is pursued regardless of the value of the dollar. ‘We see this as a long-term process, because we believe that the US is not exploiting its export potential,’ explains the US Deputy Secretary of Commerce... ‘Our competitiveness is based on fundamental factors, the strength of companies, the aggressive policies of the US government, and the reorientation of the US economy toward foreign markets.’” (Handelsblatt, April 28, 1995)

The “strength of companies” and “export potential” are there and only need to be exploited; the “factor” that turns this possibility into reality is the “aggressive policies of the US government.” US policymakers attach great importance to this “aggressiveness.” High-ranking diplomats never tire of playing up this new resolve; they use an explicitly undiplomatic way of speaking and even casually act as if they have already taken a decisive step forward with this kind of mental drill. US policymakers are making a point of demonstrating that they are now acting entirely “selfishly,” exclusively in the national interest; they want to antagonize their competitors; and part of taking off the “kid gloves” is openly disclosing that the CIA has been instructed to concentrate on economic espionage.

b) The addressee: foreign economic nationalism

The government wants to express two things with this “aggressiveness”:

Such streams of thought flow from a criticism of the “partners” / competitors. The US state translates its dissatisfaction with the nation’s gains from the global activities of US capitals into the belief that they are being denied their right to success despite all their know-how. This is attributed to its competitors’ habits of flouting the world market. The USA is accusing its competitors of doing the very thing that it is itself now publicly announcing to the world, that is, of having adopted from the beginning a behavior that seeks to politically correct the results of competition, and of not having stopped to this day. The USA accuses itself of not having behaved appropriately for a leading power, in that it has showed much too much consideration for the national egoistic machinations of the upstarts. According to this interpretation, the erosion of the USA’s economic power is a result of its restraint in using its (existing) power – so it’s just a matter of using this power correctly.[6]

So much for the strictly ideological claim, derived from its own dissatisfaction, that the behavior of foreign states has distorted competition and/or therefore disadvantaged the American nation; it has to blame itself for allowing this to happen. America sees itself as having a responsibility – actually against its own convictions, but therefore all the more justifiably – to put a stop to the harmful economic policies of other states. America’s disadvantage has been brought about by government, so it can and must be removed by government:

“My belief is that for four decades we have been locked in an ideological time warp – engaging in a fruitless debate about what role government should play. Our competitors figured that role out long ago. And that’s why, I think, they’re doing better in the global marketplace than they should [!], and why we’re not doing as well as we should. We intend to change that.” (Ron Brown)

c) “Liberalization of the world market” – with a clear thrust

The last quote might suggest that the Americans want to repay like with like – but that’s not the American way. Even if they take measures that seem to have been copied from the economic policy arsenal of their Japanese and European competitors, they are, according to their self-image and intentions, completely unique. American threats, blackmail, and penalties are always exemplary of something higher: namely, the desire to bring about a new order that is once again productive for everyone involved.

The new but old “vision” of the USA is called “free competition”: it’s only truly free when uninfluenced by state attempts to initiate business, raise capital, increase productivity, and provide access to credit. Such influence may indeed provide advantages for individual capitals or an industry, but it hinders the “whole” of capitalist development, and is paid for with greater damage overall. Hence, there is good and bad competition: the good competition is that of private individuals who freely direct their property to wherever the greatest increase can be achieved; the bad competition is that of states who want to hold on to profits for themselves against others and against the actual vocation of private individuals. In doing so, they force them into a non-optimal form or investment, because if states are forced by necessity to exert this influence, then the proceeds do not find their way to them almost by themselves; not only have they not earned them, but they have also kept them from being used for better purposes.

This apotheosis of free competition is really not the intellectual property of the Americans. However, it is fitting that they see themselves in their national ideology as the outstanding representatives and champions of this “free competition” because it reflects their own imperialist success; this nation has always spared itself the ideological weapons that are widespread among the catch-up states, such as “social market economy,” “industrial policy,” or “interventionism.” However, the USA does go a bit far when it wants to encourage other states to voluntarily submit to the free flow of capital, to “fair” competition in the way that it imagines it. The fact that it is nothing but capitalist states that are clashing here is equated by the USA with the fact that they must therefore all be in favor of the “free world market” as a collective project. The USA preserves the system concept completely without the enemy; and, in the American view, the new enemies of the system are those who do not accept free competition without reservation, i.e. those who do not share the idealism about the collective project that America contends is compulsory – generally speaking, everyone. There is no need for the communist camp to commit absolute violations of freedom and the market economy in order to denounce socialist crimes against freedom and the market economy; there are enough of them, in all shades, in their own camp – from Cuba to Japan. The USA makes its outstanding contribution to the collaborative project, which it is the overseer and guardian of, by rapping the enemies of the system on the knuckles. This should not be interpreted as hostility. After all, it is only concerned with the well-understood self-interest of each nation, because service to the world market promises rewards: once it has finally been put in its rightful place by states and is no longer judged from the point of view of national benefit – it will unfold its true earning power and generate an undreamt-of mass of revenues. Although these will be generated to varying degrees in different nations, they will then be easily added together as the property of the system. This “pot” will be larger than the sum of what the nations have produced on their own to date. All that remains is the problem of its correct distribution – which will then probably have to deal with what each individual nation is expected to contribute. So there have to be differences – but if everyone is somehow better off ...

The intention is obvious. The invocation of shared gains emphasizes the diversity of gains – and that America is not satisfied with its remuneration. The invocation of an unprecedented growth potential that will come about when everyone involved behaves reasonably has a primary beneficiary, namely the one who, in its eyes, has been short-changed by the now “suppressed” potential. “Freedom of capital,” or the withdrawal of national influence, means preferential treatment for US capitalists all over the world. If the USA is beating the dead horse of shared ideals, it is because it is concerned with the loss of its customary lopsidedness and wants to turn this around.

Under the banner of “our system,” the USA wants to persuade its competitors to back down. The fact that it expresses this as a necessary response to its competitors’ misbehavior is not simply a stupid belief in justice, but makes practical sense. When the USA invokes “the system” with all its ideality, it is talking about the fact that the world market, which it is the “creator” of, is not functioning in this spirit. If, for the USA, this system is losing the essential quality of reproducing its primacy, then it is high time to remind everyone what it was meant to do. The spread of a possible harmony between capitalist states in the service of collective growth is the appropriate way in which the “superpower” presents the sole, directly adjacent alternative: They can attack anything that unites the system, they will then only be at odds with the other nations – and it dares them to carry it out. But still, the USA would like to say, it has not reached that point yet and doesn’t need to. The others “only” need to acknowledge that they are terminating the cohesion of the system from which they have benefited when they continue this way. This is definitely no longer an ideological exercise and no longer understood as such by anyone because this “acknowledgement” must, of course, consist of practical concessions: The USA must once again be provided with the special benefits of its world market.

2. The USA in the dispute over national gains from the world market

In this spirit, the USA has for some time now been bombarding the world of states with a flood of new trade policy demands. These are stitched together in the following pattern: Firstly, the state in question should do more to ensure that growth occurs under its sovereignty. Secondly, it should do this primarily by opening its market. Thirdly, it should ensure that both growth and open markets benefit American capital and American balance sheets.

a) The European Single Market as the target of an “aggressive trade policy”

This three-step approach was recently explained by the Secretary of State for International Trade, Mr. Garten, during a visit to the EU. Referring to the volume of trade already taking place between the EC and the US and the importance of the EC as a location for American capital – US companies generate “55% of their foreign sales in Europe” – he propagated the mutual benefits to be derived from expanding these business relations:

“It is important that Europe continues to see the further opening of world markets and bilateral economic relations in its interest and opens itself even further than its commitments in the WTO and the Single Market envisage. This is the path to higher living standards, stronger economic growth, and more employment in Europe.” This, in turn, can only increase the USA’s benefits from trade: “American exports to Europe are heavily dependent on European economic growth... it can be assumed that an average 3% growth in gross domestic product in the EU over the next 10 years will lead to an increase in American exports worth over $120 billion – more than double current American exports to the EU.” (AD May 3, 1995)

Garten invokes an automatism that until now has turned European growth to American advantage; at the same time, he is just as reluctant to rely on this as on the insight of his counterparts when it comes to “market liberalization.” Here and now, according to Garten, Europe should provide more benefits for American capital, regardless of the current state of the much vaunted “growth” there. In this sense, he wants to

“First, to emphasize the importance of a level playing field for American companies in different sectors and different projects in Europe. Second, we are putting the finishing touches on a new economic strategy for our embassies in Europe, which we call ‘showcase Europe’” (ibid.)

and he intends to help American companies “expand in all European markets.” To this end, “new partnerships are to be formed between embassies and American companies” and a “significantly increased funding program to support American companies in government procurement or major projects under government control or with government involvement” are to be launched. Garten already had one specific program point in his luggage: Germany should

“open its lucrative market for power generation equipment... Garten said he still had no assurances that this contentious issue would be resolved in the near future. With billions of dollars in investment at stake, the US would not let up without a favorable decision. The continuation of a situation in which virtually all contracts for power generation equipment went to German firms would be a major problem for the US... The system (of bidding) is designed in such a way that essentially only German firms can win. No US firm has won such a contract in 15 years.” (IHT April 29, 1995)

The invocation of the extent to which American companies are already making money from business in Europe through sales and investments, and the common interest that both sides have in more growth, ends with the complaint that European governments are not fulfilling their obligation to allow US capitals to share in the profits that – growth or no growth – are being made right now.

b) The American-Japanese trade war

The US has been taking a harsher tone in its stance toward Japan for some time now: Firstly, it is outraged by the growing trade deficit with Japan; secondly, it believes it can afford tougher measures against Japan. In order to promote “growth,” the USA is constantly demanding “economic stimulus programs” from Japan, i.e. more government loans for business. In order for US capital to participate in such growth, it is demanding more market access: Japan is accused of reserving its internal business sphere for its capitalists. To guarantee this participation, the US is demanding that the Japanese government allocate more sales to US companies in this market.[7]

In the last trade dispute, the USA went after Japanese car exports in this spirit. The starting point was the observation that 60% of the American trade deficit with Japan is due to car and parts exports from Japan to the USA. In response, the US demanded that Japan import more American cars and that Japanese companies producing in the US buy more American parts; and it linked this demand to “numerical targets,” i.e. for the Japanese government to firmly commit to and enforce such purchases. In the event that Japan refused, the US threatened a 100% import tax on Japanese luxury cars, that is, to exclude them from the US market. In the end, an agreement was reached in which neither “numerical targets” were set nor the Japanese government committed to any firm pledge to promote imports. The agreement was essentially that Japanese car companies would pledge to buy more car parts in the USA and to include more American cars in their sales range; they also announced that they would invest more in the USA. The Japanese government agreed to “deregulate” the spare parts trade, i.e. to reduce safety and environmental requirements. This round therefore ended in a “draw.” However, the American government wanted to interpret the matter as a victory:

“The President viewed the negotiated settlement as a victory for the American people, but also for Japanese consumers, and praised the outcome of the negotiations as an important step for free trade throughout the world... The artificial trade barriers in Japan, particularly in the automobile sector, were one of the greatest obstacles to free and fair world trade, and for over 20 years, American presidents had tried unsuccessfully to resolve this problem. The current administration had steadfastly adhered to its trade policy principles... For Americans, this meant new jobs; for the Japanese, lower prices and more choice.” (NZZ June 29, 1995)

Growth in America is supposed to benefit if Japanese capital enters the US market more intensively and US exporters, rather than Japanese suppliers, generate sales and profits in Japan. At the same time, the esteemed public should see this success as a contribution to the all-sided promotion of business in both Japan and the USA. The US President thus insists on the view that the expansion of Japanese car exports to the USA and the growing US trade deficit reflect a Japanese policy that hinders all-sided growth by one-sidedly promoting Japanese earnings; which is why, by reversing this logic, freeing trade to become a “two-way street” should spur growth. According to the American government, this is supported by the fact that Japanese companies have declared their willingness to make corresponding purchase commitments, meaning that capitalist reason is on the side of its market opening policy: the Japanese have supposedly also had to “realize” that growth achieved through one-sided use of the American market is ultimately of no use to them.

They are therefore far from being trustworthy. With this in mind, the US government launched another diplomatic round and published a “background paper” before the treaty was signed, claiming that the treaty did contain a commitment to “numerical targets.” The Japanese were accordingly outraged, especially since “the US government intends to set up a new mechanism to monitor the final agreement.” (SZ August 22, 1995) No sooner had a bilateral agreement been reached than the USA made it clear that it was demanding authority over its interpretation, thus underlining once again its demand for the other contracting party’s subordination.[8]

c) “Free trade” = politically seizing profits

The USA is reversing the burden of proof: American balance sheets are in the red because their capital is not being used abroad.[9] It believes this is particularly in need of correction wherever their government contacts are direct customers:

“In the future, the US wants to press Tokyo to give more consideration to American companies in the implementation of development aid projects financed by Japan... Japan’s development aid is tied down to 90–95%, but so far American companies have only accounted for 5% of the total contract volume awarded. Garten declined to give specific details on what proportion of the total contract volume he considers adequate for American companies, but emphasized that the lack of transparency in the Japanese procurement process is a major problem.” (NZZ August 2, 1995)

The observation that Japan is using its own powerful means to “occupy” foreign markets, and the accusation that it is thereby depriving the US of income, is followed by the rather contradictory demand that Japan should see its imperialist projects as a kind of service to US interests and allow US companies to share in the proceeds from such deals. The US is unwilling or unable to strain its own credit for such ventures; so the credit of the rival should provide the markets that the dollar does not create.

It is only a small step from these suggestions to the accusation that other governments are illegally diverting income that is due to the USA into their pockets. For several years now, the US government has been demanding that the foreign subsidiaries of American “parent companies” be included in US tax law. This is a direct attack on foreign legal jurisdiction: Wherever foreign sovereigns use their state power to obtain income from “American” capital invested in them, the USA maintains that this is “its” capital, and must therefore also be subject to its law. This demand comes very close to the idea that foreign state powers are obliged to pay tribute to the USA.

3. American trade diplomacy

a) The method: Extortion for the sake of accommodation

The USA has declared the world market to be a question of the correct distribution of profits, other nations to be detractors of America’s income, and its own foreign policy to be a means of correcting national balance sheets. This concern, however, must not only be declared, but also carried out; the question is how the USA will manage this. The subservience that the American project is aiming for is supposed to come about as the will and insight of precisely those nations whose economic means of power are the primary source of America’s dissatisfaction. The USA wants to enlist the support of state authorities whose power it has confidence in and whose cooperation is important precisely because of this power. That’s why, as much as it would like it to appear as an ultimatum: At the end of every dispute there must and should be an agreement that allows both sides to return to business as usual. The conflicting interests of the competitors must be taken into account if one wants to instrumentalize them for oneself.[10]

b) The means: threats with the market and the dollar

As a means of asserting its concerns, the USA is testing out a huge extortion program against its competitors. In this program, its market and its credit are not being used as positive offers to the interests of nations and capitalists, but negatively, as a means of political pressure and intimidation. The USA is using the dependence of other nations’ earnings on their access to the US market and on the status of American credit to demonstrate what it could withhold from them if they do not submit to American interests. This tactic includes openly threatening its competitors with steps to deprive them of the benefits of the US market and to destroy their business. This “argument” is intended not only to persuade the partners to give in, but also to encourage them to enter into new, more cooperative economic relations. As extortion, this certainly works; it does not exactly create a new era of friendly cooperation.

American offers to “open markets” looks how you would expect:

“The Clinton administration wants to set a new course in international air traffic. Transportation Secretary Pena declared in 1994 that Washington was aiming for an ‘open skies’ policy in the long term. This has now been achieved with six European states. As a close associate of Pena explained, this is the ‘only way to put the gun to the Germans and the British’. ... The fact that the deadlocked negotiations between the USA and Great Britain have now been resumed is seen by Pena as a sign that the strategy is having an effect.” (SZ April 12, 1995)

The intention is clear: the USA wants to secure business for its airlines throughout Europe and at the same time put pressure on the EC as a whole to conclude an agreement on its terms. Just because the pressure is effective does not mean that the USA will achieve its goals by a long shot. As a countermeasure, the EC Commission first threatened the relevant countries with legal proceedings because their special agreements with the USA jeopardized the standardization of European air traffic and weakened Europe’s position vis-à-vis the USA on this issue. At the same time, it made the USA an offer of bilateral negotiations. Since then, there has been a dispute about this within the EC, and the conflict continues to simmer transatlantically.

In other contexts, the USA is threatening to use its power to seal off its market against foreign business activity: Sanctions. The “punitive tariffs” threatened against Japan were not intended to make competition more difficult in one sector; the negotiations were not even about the terms for importing luxury cars. The threat to exclude the affected cars from the US market was expressly intended as a means of extortion to demonstrate to the Japanese government what it stood to lose overall on the American market if it did not back down. Certainly, the US continues to claim that a mutual benefit will materialize if the other side shows a willingness to compromise on the terms of trade. What it is actually demanding, however, is the opposite: a stand down. The reference to Japan’s dependence on business with the US and the prospect of even greater damage is intended to force it to accept what the USA is demanding.

The dollar is also increasingly serving the USA as a national weapon because it is indebted to the entire world and its creditors are more affected by the negative effects of the dollar’s devaluation than the USA itself. While the dollar was once a political instrument of the USA because other nations needed and wanted to earn it as world money, the extortionate power of American credit today stems essentially from its existence as a huge mountain of debt piled up in credit institutions and government balance sheets all over the world, disrupting markets and balance sheets with its erratic price movements and thwarting the economic calculations of capitalists and nations. This “power” of the dollar is a somewhat strange means of extortion in that its use does not bring the USA itself any real economic return. Although the USA can flood the world with more and more dollars and saddle others with worries about its “stability,” this does not make its own credit any more useful to it. The dollar is therefore no less effective as a means of political extortion: its “turbulence” makes competitors realize how much their own credit depends on that of the USA. This certainly applies to Japan, which cannot escape the dollar. It is experiencing its decline as a permanent crisis of its own credit system whose balance sheets are being ruined by the devaluation of dollar securities. As a result, Japan’s entire economic life has been permanently damaged and driven into a kind of permanent depression. Japan’s decision to give in on the issue of market liberalization is at least as much due to its admission that, as a creditor, it is dependent on the USA and therefore cannot tolerate any further depreciation of the dollar as it is to the threat of American sanctions. The EU, on the other hand, has already largely freed its credit from this dependence on the dollar, which is not to say that its decline won’t also cause damage to the European credit markets. The fact that European central banks are also participating in support measures for the dollar and that European governments are sulkily “supporting” Mexico’s aid package proves both of these things: without them, a “stabilization” of global credit is not possible; but they too cannot evade the need to cooperate with the USA. In view of this, it is only logical that they are working to accelerate the completion of their “DM zone.”

c) “Bilateralism” and “supranationalism” I: How the USA is undermining the WTO

The USA is proclaiming “bilateral” negotiations to be a suitable strategy for obliging other states to provide new services to US growth. This has consequences for the new World Trade Organization (WTO).[11] Barely founded, this institution is now being treated by the USA according to the following pattern: Useful if it can be used to force something on others; to be ignored if it can achieve more on its own; harmful if it interferes in disputes that the US would prefer to conduct in its own “bilateral” way.

The USA did not take the trade dispute with Japan to the WTO with the candid argument that its case would have no chance according to its rules. Although it countered the Japanese complaint with a counter-complaint, it immediately revealed this to be a diplomatic maneuver intended to preserve the form of trade diplomacy, but in no way did it want to cede the two-sided dispute to the WTO. After the dispute ended, the Japanese withdrew their complaint, and the WTO chief was left with the somewhat tepid statement that he would, of course, be just as happy if nations simply came to an agreement between themselves. The very first major dispute between the world’s economic powers proved that the USA will not accept the WTO as a forum whose decision-making procedures are going to determine the interests of its trade policy. As a supervisory body whose regulations cloak the differences between the economic powers in the form of a “regime” of permissions, prohibitions, and exceptions, the WTO was fundamentally devalued as soon as it had been founded.

The US recently shocked the world of states by announcing that it would simply not sign the newly negotiated financial services agreement[12] because it was not satisfied with the offers made by other nations. At the same time, it decided to immediately deny comprehensive most-favored-nation status to newcomers to the US financial services market.[13] The US now selectively decides which nation is “allowed” to do how much with it in this sector based on the rights granted to American banks, brokerage houses, and insurance companies in the other market, entirely in the interests of its financial industry,

“which believes that bilateral agreements will provide faster access to the markets of developing countries... On the other hand, Washington is wary of wantonly blowing up the negotiations. The US representatives have not attempted to prevent a conclusion to the services talks, as would have been formally possible.” (HB June 26, 1995)

The USA apparently did not consider it necessary to prevent other nations from reaching an agreement without it. The EC then emerged as the new leading power in trade diplomacy and ensured that a two year “interim agreement” was reached after all. In this sphere, there now exists the rather unique situation that, on the one hand, there is a WTO agreement on financial services based on the most favored nation principle and, on the other, the largest and most financially powerful nation in the world is not only not participating in this agreement, but has announced that it will negotiate its own private arrangements with other states as it sees fit; it can then confront the WTO after two years with these as a fait accompli, which should then be taken into account in an overall agreement. A certain lack of clarity arises when the largest world economic power sets out to ensure more “fairness” in world trade.

d) “Bilateralism” and “supranationalism” II: The “new economic architecture”

The USA is not quite satisfied with the results of all this theater. It is not lost on it that, although it can use its power to extort a few things here and there, it is turning important “partner” nations against it and not really getting any closer to its ideal of a one-sidedly beneficial world trade. The USA does not want to let up on its project, but it is noticing in the reactions of its partners/opponents a contradiction inherent in its plan to persuade them to cooperate by threatening to harm them. This gives rise to its need to give these disputes a new, reliable diplomatic form, to create a new “place” where “everything” can be discussed, disputes can be resolved “in advance,” or at least the reaction of opponents can be made more predictable. “Confidence building measures” are intended to bring differences under control and defuse them diplomatically precisely because they are expected to flare up.

With this in mind, US policymakers are raising economic relations with Japan to a “new level”:

“The USA rejects the existing bilateral mechanism for removing trade barriers because, in addition to straining overall relations, it could also lead to shocks in the world trade system. At the same time, however, it argues that dealing with a multilateral framework is not possible because the WTO lacks the necessary competence and its decision-making is too time consuming due to its diverse membership. A new approach, a strategically designed trade partnership with regulations in a bilateral, regional, and multilateral context, is a procedure in which Japan and the USA regularly coordinate their long-term goals within the world trade system... The prerequisite for this is effective deregulation in Japan and the determination on both sides to implement the existing agreements and to monitor them jointly.” (HB June 31, 1995)

A fairly honest piece of information: the USA doesn’t like the side effect of the trade disputes that it’s instigating, namely that they cause discord. But the USA doesn’t want to submit to the WTO either, because too many interested parties would be interfering in its affairs. The solution: Firstly, the Japanese have to let themselves be “involved” in ongoing economic diplomacy negotiations in which they will constantly tell the USA what they are up to so that the US can tell them whether they are allowed to. Secondly, the Japanese have to agree to a joint monitoring of their own ongoing compliance with treaties. Then there will be no more disputes, and the world of trade will be ok again. Could certain memories of successful American arms diplomacy have been the inspiration here?

The American ideal of a “new world economic order” consists of the rather banal desire for a “structure” that ensures that the rest of the world aligns itself with its interests. By no means does the USA want a return to the supranationalism of the IMF and GATT; it regards these institutions as increasingly useless tools for US interests because its competitors have too much say within them. It wants to get back the benefits for which it once invented the IMF and GATT. In these institutions, the USA’s claim to leadership was universally accepted as international law – although this was due less to the institutions than to the practical validity of this claim to leadership. Now the USA would like to put itself back at the center of world trade as the hub of a new system of bilateral and multilateral “zones.” With this in mind, it is offering Europe a new “transatlantic dialog”:

“We want to promote the proposal for a transatlantic economic dialogue – talks between American and European companies and governments on both sides of the Atlantic about the shape and agenda of future economic relations between Europe and the United States... Recognizing that the transatlantic relationship must have a foundation, policymakers in America and Europe have proposed new ties... It seems clear that we risk drifting apart unless we have an architecture to support our relationship. That would be a tragedy – not only because Europe is our staunch friend and ally, but also because of the resulting economic setbacks.” (Garten, AD May 3, 1995)

This, in the end, is a somewhat different project than the IMF and GATT of yore. Here, the sole superpower is not offering other states its world market; rather, the still relatively most powerful world economic power is warning what could happen if the other important world economic nations go too far with their “drifting apart” on a common world market. This reflects, on the one hand, the realism of the USA, which knows that it cannot act as decisively toward the economic power of the EU as it does toward Japan without damaging itself; on the other hand, it is keen to have its principled standpoint recognized by the EC. In its economic relations with its “partner in leadership,” it would like to have something like fundamental reliability – and not just for economic reasons.

B. The internationalization of American capital

1. USA and the world market: A loss of identity

a) The plight of the USA: The global market is failing to do its task

The USA’s insistence on the unequivocal competitiveness, indeed the competitive superiority, of “its” capital, the translation of this conviction into a right of “American” capital to excellent business, the prosecutorial pointing at other states that would undermine this right, the activism of the “new strategy” that is supposed to remove unacceptable obstacles – all this mentions the banal reason for the dissatisfaction of the US state only to make it disappear immediately in this dialectic of (state) misdeeds and deeds: The capital that the American state so confidently calls its own is not bringing the nation the returns it needs. Like every other capitalist nation, it has made itself dependent on these returns and is now confronted with the problematic side of this dependence. Its standard of living – which cannot be confused with the well-being of its inhabitants, as America in particular provides ample illustrative material – is in danger: the state is not receiving the resources it considers necessary, and therefore needs, to maintain its regulatory framework, both at home and worldwide, in financial and military terms.

Accepting a dependency that says the nation’s demands and goals must be lowered based on a sobering income-expenditure calculation is, on the one hand, out of the question – actually, for any “leading industrial nation,” and certainly for the world’s leading power. And it has already taken precautions: “Resources” no longer merely include taxes and fees, “real” revenues, but also the state’s own resources, which it routinely offers to investors all over the world in the form of its (growing) debt. This gives it independence from its current income to the extent that it does not have to constantly make changes in its program due to the ups and downs of the economic cycle, but can, on the contrary, implement measures for the “long-term growth of the national economy”; and this financial commitment to its economy, this advance of stability to its future which prospers not least because of this, is accepted as functional and co-financed by its financiers, the (money) capitalists. Which makes it clear that this is not a method of abolishing the state’s dependence on “its” capital; for it is granted this indebtedness only insofar as its IOUs function as capital, i.e. prove to be a means of increasing the private money of its creditors.

It is also clear, on the other hand, that modesty would not solve the USA's problems. Its big campaign is only proof that its lack of resources should be taken more seriously. There can be no talk of a financial squeeze; rather, the usual level of state financial power (including debt), and thus also the force and scope of its regulatory framework, has been fundamentally shifted; the usual “organic” relationship between capitalist returns and the state’s financial freedom based on them no longer exists.[14] In fact – despite all the demonstrative pride in the high grade of “American business” – there is a complaint about the inadequate earning power of capital for the nation. And in this abstract sense: it is not mechanical engineering or agriculture, banks or exporters, but rather “American” capital in all its modes of existence that is failing to deliver the returns on which the needs and requirements of state and nation are based. Conversely – reminiscent of Clinton’s “learning process” – all the ultimately insufficient measures related to companies or industries for regaining capitalistic earning power would be – in Ron Brown’s ideological expression – wrongly “picking winners.”

b) The world market as the USA’s means of life

The revealing and ironic thing here is that the USA is falling back on something it has rejected for decades as un-American, even un-capitalist, namely the national basis of capital. What this means becomes clear by looking at how it achieved its national success, how it organized the dependence of its national success on the business activities of capital for its own benefit:

The once unbeatable quality of American growth was based on a lack of distinction between internal and external markets. After all, it was initially only US companies that had the capitalist strength to get the circulation of commodities going across borders and to set up production in foreign markets. What was meant by the “freedom of capital” could be inferred from what they dared to do in setting the standards of competition and what liberties they took in the process. In the course of their expansion, the world market came into being, and they essentially demanded that their own state ensure the validity of their profitable “freedom” throughout the world. The international operations of “its” capitals brought the US state the desired returns, which in turn did not require any special state monitoring or support. In the case of the USA, “national returns” was to be understood in a much broader sense than as a trade balance surplus or profit transfers. This “yield” consisted in the quality of the dollar which initiated transactions on the expanding world market in the first place, and which then logically received its constant confirmation and reproduction from this very expansion – and this “yield” in turn endowed the nation that gave birth to the “multinationals” with a financial power unheard of in the capitalist camp, and allowed it to ignore the so-called “chronic balance of payments deficit” for decades. For the American nation, this deficit was nothing but the ongoing merging of all markets under US capitalist guidance, and was merely proof of the global expansion and triumph of “its” capital. It seemed unthinkable to a nation whose path to success was internationalization that there could be such a thing as a distinction between the internationalization of capital and national profit. It had optimized its dependence on the activities of “its” capital by making it the capital of the world, i.e. by making it available to the whole world. This no longer meant just the capital of individual American companies, but American (world) money in all its varieties, from banknotes to government loans; at the time, this money was the exclusively valid material of capital accumulation and its representation.

Evidently, this identity of world market growth and the dollar has been broken: The “chronic deficit” of the USA is now a deficit, and is a reduction in its financial strength. Conversely, the US can see the solution to the problem of a lack of revenue that is undermining the nation’s standard of living only in a restoration of this identity. The “new strategy” offers an “analysis” of the dire situation: states are not allowing American companies to do business abroad; this “analysis” is also the “solution”: American capital is given access to more business all over the world – and the clear assumption is that the profits from this will benefit America. But now American capital itself has opened up the world – and the American state is complaining about a lack of revenues in terms of a broken identity. This “more” can be neither an analysis nor a solution. And if the US state wants to produce a national basis in a new way and make “American” profits for itself, the question arises: “What actually is ‘American’ capital?” Or to put it another way: “Is there any economic rationality in the politically demanded equation ‘more business opportunities for US capital = more returns for US capital = more returns for the US state’”?

2. The freedom of capital and the competition between states

a) International trade ...

The modern world market is free: the economic life of all nations is now “part” of a global business that encompasses all nations. Foreign trade and cross-border capital investments are no longer mere supplements and useful contributions to national markets; the relationship has been reversed: the volume, development, ups and downs of national production are essentially determined by trends and fluctuations in internationalized business. The “immense collection of commodities” that makes up capitalist wealth can therefore no longer be divided up according to local origins. For producers and traders, national borders are no longer barriers separating an internal market from external business opportunities; therefore, they no longer offer protection against unwanted competition. For the business world, national economies are now merely “locations”: the internal conditions of all nations are in principle for sale as conditions and means of business, and are practically compared according to this yardstick. National peculiarities of all kinds are considered “factors” in a cost calculation in which, in a very MBA-like manner, prices, wages, ease of borrowing and transportation costs, factors such as taxes, subsidies, infrastructure and “social peace,” are evaluated as “expenses” for expected returns and used as arguments for and against decisions about exports and investments.

The global market is therefore also fair: to the extent that all national economies must let themselves be compared by the same yardstick, namely as opportunities for globally active companies to make money. In the markets of other nations, American corporations have, on the one hand, faced competition in the form of European and Japanese multinationals, but on the other have merged with them to form conglomerates whose national affiliation is now just a memory of where they once hailed from. In the course of this, the dollar, once the unique world money, has also faced competition: Capitalists and financiers can choose between three “world moneys” when accessing resources, investment opportunities, and credit; the national credit of the USA must be comparable as a means of accumulating wealth with that of Germany/Europe and Japan. And US corporations, like all the others, have naturally seized the opportunity offered by two competing world moneys, now that the “freedom of capital” can be transacted on a level playing field. They have committed a kind of national treason by “overextending” their international activities to the extent that they are increasingly paying less attention to the dollar in their business dealings – and correspondingly more to other currencies. As a consequence – and this is implied in “freedom” and “fairness,” being the result of intermixing and interbreeding – it is no longer possible to tell which individual transaction benefits which country and which currency. Only on average and as an overall result do changes in currency ratios provide any information about where the mass of capital is moving; this is expressed most strikingly in the tautology that a currency is “strong” because it is considered “strong.”

Furthermore, the nations that now have global economies have acquired sovereign means in their national credit to access foreign wealth and to bind the rest of the world to their interests. They no longer have to support and equip a national business world in order to earn dollars; instead, they have an attractive offer in their own credit, one which international capital is happy to take advantage of.

For “American” capital, this means: its profitable feat of tackling the world market, expanding it and imposing its own standards on it, has, on the one hand, led to its normalization insofar as it is faced with capitals of different origins which have at least caught up in terms of size and productivity. On the other hand, it is now only internationalized when its previously quasi-automatic ties back to or into the dollar have been severed and when it carefully cultivates good relations with various political masters. It can also be said this way: American capital has pursued internationalization, it has internationalized itself through this – and now the US state finds, given the effects, that this internationalized capital no longer is automatically “its own.”

b) ...politically organized, supervised and supported

This freedom of the world market has nothing to do with an intermixing of states from world trade – on the contrary. The need for free access to all national resources originates with capital; meeting this need and ensuring that it is carried out globally was and is the responsibility of nations. They negotiate their separating borders by inspecting their permissions and prohibitions relating to cross-border trade and economic activity on their territory from the vantage point of trade barriers and the promotion of international business, with a view to rewriting their laws with the intention of creating more freedom for capital to do business across borders. From this vantage point, all sovereign regulations, from customs duties and import regulations to national legal systems and economic legislation, are subject to the scrutiny of the state to determine what it can achieve by rewriting these regulations in order to transform them into functional means of initiating and promoting cross-border business.

Even in national debates, it is easy to understand what the call for “more markets, less government” stands for. It always ends in proposals for alternative economic policies and provides the ideological soundtrack for demands for a different state management of business with its legal regulations, taxes, and loans. In world trade issues, the sovereigns themselves are advocates of the “freedom of the market,” and their actions should never be confused with a decision by the state to stay out of “the economy” because of politics. Rather, political powers extend their responsibility for the fortunes of business to include foreign countries whose national representatives must be obligated, with more or less extortionate offers, to adopt an economic policy that serves their own balance sheets. States are only interested in freeing up capital because and to the extent that they want their national revenue to benefit from international business; they therefore want the rights that they themselves grant to foreign capital to be enshrined as obligations that the other nation has towards their own business world. They view the trade partner whose business opportunities are to be exploited as a competitor whose advantages from the newly and freely organized reciprocal business should not be seen as a limitation on their own. All nations constantly scrutinize the movement of commodities and capital back and forth across borders from the vantage point of how well or poorly they are doing in the process. With this in mind, they constantly modify their own regulatory systems, create business opportunities, alter competitive conditions, and push for new or modified international agreements that benefit them. In the course of the internationalization of capital, states not only do not withdraw from the world market, but on the contrary constantly develop new procedures and regulations for its organization, management, and supervision. Both at home and abroad, they are the indispensable guarantors of the validity of the new freedoms of capital – and at the same time the ones who constantly contest their validity in the interests of national advantage wherever they have the power and the means to do so.[15]

States that have positioned themselves in this way toward the business of capital have redefined themselves into business locations: Attracting international capital is their means of life. They therefore orient their entire economic policy toward this means: they submit themselves to the location comparison of the capitals they desire by using their means of power to influence it to their own advantage.

c) The finished world market: A collective project

The USA did not get involved in this “system” – even if it likes to grumble about its own “considerations” today – but rather established it and promoted it in the first place. It was a compulsory role model for the other states insofar as the new access rights created for its capital to the markets of all nations liberated their capital from the very outset[16]; it was easy to advocate that tariffs and other trade barriers be “torn down” – with lots of pathos about freedom, of course. The “partner states” were different, as they were intended to be co-sponsors of global capitalization and were themselves just as determined to get ahead in the global competition that this opened up: Initially, they simply could not afford the all-encompassing American standard of freedom. They needed protection and “exceptions” for their backward economies, a preferential support for their national capital. This was the only way they could succeed in capturing for their nations the American capital that was pouring in, by submitting special offers to participate in the upgrading of their national capital in terms of size and productivity – so that they would be capable of acting internationally!

For a long time, the USA was quite happy with the national economic policies of the ambitious rivals, their cultivation of national capital and exports. Not because it was altruistically concerned with a “level playing field” or out of a greater understanding of the dependence of American growth on the growth of foreign markets. Rather, it was for the simple reason that this foreign growth actually benefited the USA and that American capital, by using it, simultaneously secured its capitalist superiority. For this reason, the USA was generally quite understanding and willing to compromise when the newly emerging capitalist powers in GATT, the IMF and the World Bank pointed to competitive disadvantages and insisted on exceptions and special regulations, on the right to gradually accommodate their economies to the new freedoms. At that time, the USA still saw such requests as proof that the other nations would never be able to keep up with the force of its wealth.

The USA launched the internationalization of capital as a project; the other economic powers joined in and used their national resources to make the best of it for themselves. Together, they opened up new earnings opportunities and possibilities for the business world, which seized them and actually brought about a worldwide growth of capital. So for a long time the USA could easily imagine that, as the supervisory power and main beneficiary of “its” system, it had created an unbeatable recipe for the success of its national revenue from this world market.

C. The USA in a crisis of competition

The fact that the functioning of the world market no longer coincides with the growth of American capital has become clear – and intolerable – to the functionaries of World Power No. 1. In blaming its competitors, however, it is overlooking a key point: growth is currently sluggish across the entire world market. It’s a crisis.

It is the completion of capital’s internationalization – with US capital leading the way – that has exhausted the world market and overloaded it with claims to the realization of capital that can’t be met. Ironically, the system of free world trade has proven its efficacy not only by eliminating national trade barriers, but also by internationalizing barriers to accumulation; the USA is being confronted with the logical result of what it has pursued: capital’s liberation from national economies into a world economy. If it doesn’t seem like business is expanding on the world market at the moment, this has nothing to do with national markets being closed or withheld from capital – quite the opposite. The fact that capital is currently unable to bring about even more accumulation is not due to either geographical nor political reasons, but rather to the purpose of this growth and the means that capital uses to achieve it. It is precisely because the capitalists of all nations are using all locations – as suppliers of raw materials, production sites, new markets – that they have produced the barriers to profitable investment that they are now coming up against. Taking advantage of credit, they are waging a cost-cutting battle for growing market shares, filling the world with factories, and flooding it with an enormous amount of commodities. In this way, all capitalists are collectively piling up ever newer claims to profit and at the same time limiting the solvent demand of those whose labor they claim as the means to generate their surpluses. In this way, they periodically bring things to the point where the “ultimate reason for all real crises ... the poverty and restricted consumption of the masses” (Capital, vol. III) comes to light, and the “mass purchasing power” which they curtail in the form of wages fails to do its duty in realizing growing profits. In the end, too much capital has been periodically invested for it to be profitably realized.

The capitalists of all nations are currently competing to see whose capital assets will bear the brunt of the devaluation that is due. New “growing markets” and business opportunities can only be opened at the expense of the rivals, and the profits generated essentially serve to compensate for losses incurred on other fronts.

The states have drawn the compelling conclusion: if the world market denies them the returns for which they have expanded it, then they have neglected the obligation of the globally active capital to operate for the benefit of their balance sheets. They take sides with the capital operating from their own territory, subsidize it with public loans in privatization campaigns at considerable expense, seek – with the weapons of tax and credit policy – to promote its global expansion at the expense of others, and know all about the competition that needs to be displaced, worldwide. They are increasingly discovering and producing national qualities in internationalized capital.[17]

It is therefore a process of exclusion in which those states that do not get enough from capital do not become critical of capital, but instead turn on each other. They are concerned more or less openly with redistribution, by which they ideologically advertise themselves as protagonists of a “new” growth. Whereas, in the past, states’ interventions in the free movement of commodities and capital were aimed at gaining (growing) shares in the enlargement of the world market, the aim now is to restrict each other's shares. The measures they initiate to promote their capital, to secure national returns, are no longer a contribution to growth, but a deduction from somewhere else. This goes in turns, so they are all a nuisance to each other.

The USA is responding to this new situation in its own superpower-like way. In the crisis, it maintains that, firstly, dismantling national trade restrictions all around was a successful recipe for an all around growing world market and that, secondly, as the protagonist of this program, it did well by it for a long time. Now that over-accumulation is causing it damage, the USA is defending this historical truth as an ideology and as a special national recipe for success by, firstly, reversing the correlation – no growth = too many market barriers – and, secondly, by aggressively directing it against its competitors as a national exclusion program.

When it vigorously advocates its “free market” postulate today, then, as comprehensively as it defines its national access to world market profits, it is primarily ensuring a revision of the freedoms it has achieved: Foreign capitalists have to buy in the USA, foreign markets have to deliver sales and profits to American capital, and their political guardians have to enforce this on America’s behalf. The American demand for free trade, unregulated by the state, ends up in the demand for the services of foreign sovereigns to American profits, for the use of their power in the interest of the USA.

Its demand that other nations should hand revenues over to it – as if Japan and the EC had anything to spare here – documents that it doesn’t want to know anything about the barriers that its economic means of life imposes on it; and it denies any objectivity to the barriers it is up against. It is therefore also ignorant of the circumstance that the surplus it demands from its competitors can only be obtained by further damaging them, which also means that they will be even more unavailable as buyers and investment spheres for American capital. To the extent that the USA succeeds with its project, it undermines the earnings of all nations from world market business even more.

This can be seen in the outcome of the recent trade dispute with Japan. First of all, it seems absurd to come at a nation that, of all things, is currently suffering a credit crisis and a recession, with the charge that it is making too much money and should give away some of it. For the reasons given above, the USA is not interested in whether Japan has anything to give; just as it is not even interested in the fact that national European airlines are currently going bankrupt one after the other and can hardly deal with any additional American competition. Its narrow-minded view of the matter is that there is business going on that can make money, and that other nations are profiting from it – and it isn’t.

But the crucial point is: this absurdity has a hard economic content. Unfortunately, the world market is not a pot whose sum contents could be distributed among the nations in a different way without causing damage if those involved only had the goodwill to do this. Rather, the world market makes states dependent on an external growth they rely on to maintain their domestic markets. Going in and taking away business from elsewhere to use it for their own ends destroys the useful coercive relationship of interdependent profit-making. The American fixation with Japanese trade surpluses as a deduction from the American balance sheet generously overlooks, firstly, that these surpluses have long benefited American balance sheets as a source of productive capital investment in the USA and the financing of the American national debt. Secondly, it refuses to acknowledge that these surpluses are currently not useful to Japanese balance sheets either, thus are not quite surpluses at all – that is, in the only capitalistic sense in which surpluses matter, in that they would be suitable for reinvestment. A lot of expensive yen – the banking system in the Far East is currently collapsing – do not represent any surplus Japanese credit that could be turned into capital; in fact, this will not change even if the yen falls again.

In a time when the global market is growing all around, it might still be acceptable to approach another nation with the demand that it should politically “redirect” buying and selling to the order books of its own capitalists: Then one or two businesses might go under while others profit. When the over-accumulation of capital has occurred, the damage to private businesses adds to the already existing restriction of the market, thus exacerbating it. Then American exports are not a contribution to an expanding Japanese market whose producers then have to adapt to new competitive conditions with the help of credit, rationalization, etc., and do so, but directly replace previous Japanese business on a limited market, merely generating further red figures for Japanese capitalists and undermining first Japanese and then international credit.

It is therefore not just that the USA is not making much progress in its push for a political correction of its balance sheets. It is precisely because of its economic power and the comprehensiveness with which it presents its concerns that it is making a not insignificant contribution to exacerbating the crisis on the world market. This is perceived above all in the sphere of trade diplomacy: the US government is increasingly confronted with the accusation in its own public sphere that it is acting less as a leader of world trade than as a troublemaker who is unnecessarily antagonizing other nations.[18] At the same time, the USA is not aiming to break off business in the methods it uses to attack its competitors. Its threats of sanctions are meant to be a demonstration; they are intended to vividly illustrate all the damage that could occur if American wishes are not met. American politicians are also aware that the US economy itself has no use for the damage that the USA threatens to inflict on other nations by denying them market access, so threats of sanction are a rather two-edged sword. It’s just that it doesn’t really have control over the others.

The damage that US policy causes by threatening these sanctions lies not only in the direct economic effects that their enforcement would have on production and markets in both nations. It also affects the reliable conditions for buying, selling, and investing on the world market which are regulated between states. By threatening to put an entire business sphere out of existence in order to exert political pressure on another government, the US is confronting the international business world with a new kind of “location condition.” It may ask itself whether “something like this” could become standard practice for a nation that is as dissatisfied with the course of the world market as it is powerful enough to prevent quite a lot of it. With its political dictates, but also its threats, the largest world economic nation brings a moment of political unpredictability to business life which capitalists must now adjust to.[19] This “protectionism” directed at the business of the entire global market, which does not want to come to terms with the earnings situation of the capitalist corporate world and claims the right to global sources of wealth through national economic strategies, in no way promotes “growth.” Rather, it promotes the will of the competing states or blocs to counter this with the same approach. To the extent that the members of the “Free West” are officially at loggerheads over their national needs in terms of “wages, prices and profits,” they are enlivening, from the down-sides of money-making, the culture of contention which has long prevailed in supervisory matters relating to the balance of force between nations with the beautiful slogan “New World Order.”

[1] “The Commerce Department has set up an ‘advocacy center’ commonly called the ‘war room’...‘War room’ may sound like Adventure Games, but the name isn't just a slogan. 'Our national security is so intertwined with our economic security that we have to look at this like a war,' says one senior official.” (Newsweek, March 6, 1995)

[2] If one looks at how the “new strategic vision” translates into action, a hint of ridiculousness can be detected. The US consul in Hong Kong manages to sell the feet and wing tips of American chickens that would otherwise be processed into animal feed to the Chinese; the ambassador to South Korea holds a car sale show on the lawn of his embassy; a senior diplomat to India wins a contract for an American power company by throwing himself at the company’s executives with “kisses and hugs”; the ambassador to Japan spends two years advertising mainly for Motorola; etc. At their training academy, American ambassadors are now required to undergo a program called “Diplomacy for Global Competitiveness,” during which they are lectured by managers, given lessons in sales strategies, and perform role-playing exercises that mimic trade talks with Japan.

[3] With this redefinition of foreign policy priorities, the “Reforms for America” project, which Clinton’s people were captivated by just three years ago, is finally over. This program was quite contradictory. On the one hand, it raised doubts as to whether America hadn’t been negligent in developing and exploiting its national potential; it also raised the question whether America hadn’t neglected a few necessary technological advances. On the other hand, this should by no means be confused with a criticism of the “American way of (economic) life,” but rather, quite the contrary, merely polished up its settled uniqueness and superiority. Rather half-hearted attempts at reform failed due to the sensible democratic provision that no majorities could be found for them: The majority of representatives of the American people simply couldn’t understand why America should be seeking remedies when it is already incomparable; or vice versa: the reformist interventions in the American way of free competition would be its ruin and the surest path to unbearable mediocrity – “big government” is the hate word coined by the Republicans, and it resonates with the people. These critics are driven by simple annoyance that America’s leadership role has not become more stable three years into a “reform presidency”; they only have to say that this is the result of these “reforms” or simply of an un-American mindset. This does not make the reverse correct, but it is a compelling political “conclusion”: the only thing America can rely on is the sovereign use of its might. The President himself has thus learned this lesson from his domestic political defeats and the growing intransigence of his foreign counterparts and has decided not to reform the nation’s economic weapons, but to deploy them against his competitors. See GegenStandpunkt 4-92, The USA in crisis.

[4] “I can remember a time, not very far back, when, as a businessman, you had the sense that the State Department not only didn’t want to help you, but you were even treated as the saying goes: ‘We don’t get our hands dirty with business matters. If you go to jail, call us.’” (Commerce Secretary Ron Brown, ibid.)

[5] Ron Brown put it this way: “(Question:) What about ‘industrial policy’? Let’s look at the buzzword ‘picking winners,’ a term Republicans have always used to attack such policies. They pick out certain industries and recommend them. That can only be described as ‘picking winners.’ Brown: Picking winners means, for example, taking a company and doing this or that to make it a winner. But we advocate the interests of any American company that is in competition with a foreign competitor. I don’t think this ‘picks winners and losers,’ except: American winners versus foreign losers.” (Newsweek, ibid.)

[6] This conflict is inherent in the American concern: does granting rights and means expand one’s own power or share it? So now the faction that has always deplored and feared that the “partners” are also competitors who must be kept down is once again speaking out with its “we always knew it.” It sees the matter in such a way that its 40 years of criticism of the wrong use of power is now being proved right: if you have underestimated the danger for so long, you should not be surprised when it finally becomes reality, and by this it makes its useful contribution to national navel-gazing: What is the right use of power? Namely, in the form of the recipe that has always been available and now has to be honored: don’t make this mistake again and the danger will go away.

[7] See GegenStandpunkt 2-94: Die amerikanisch-japanische Partnerschaft – So frei ist der Welthandel [untranslated].

[8] The USA requires its car makers by law to meticulously mark the “national” origin of every car part – so much for “Japanese bureaucracy.” This has led to yet another dispute over how to interpret what the new agreement means by “added value … The Japanese government rejects the American formula, which is intended to measure the US content of parts in cars from Japan... This means that parts manufactured in Canada can be labeled as American products. But because Japanese companies also source parts from Canada or produce them there, they want equal treatment with American producers.” (HB August 8, 1995)

[9] The dispute between Kodak and Fuji is highly instructive for this point of view. The starting point is the observation that Kodak has a market share of around 40% for film in all relevant parts of the world – but not in Japan. The “conclusion” from this statement is: then the competitor Fuji, in conjunction with Japanese policy, must have prevented us from gaining the same share as everywhere else by unfair means. “40% market share” thus appears to be the quasi-natural result of an existing world market competitiveness for which Japan is to be held responsible. This argument does not complain about not being able to enter a market, but equates market access with success in it, thus reflecting exactly the American policy position.

[10] This is what the dispute between “internationalists” and “isolationists” is all about. There is agreement on the goal: command over the adversaries must be maintained, all the more compelling the more powerful they are. The “isolationists” have always held the view that one must never allow things to get to the point where one has to accommodate foreign interests; they believe that this would tends to be a loss of command. Their recipe is: don’t bother – secure the power of command by exercising it summarily. The “internationalists” think this approach is unwise, as it provokes resistance which, although it can certainly be overcome, causes unnecessary frictional losses. They believe that it is a way of showing their “partners” the advantages of submission to America. A ruthless, ideally “isolationist” use of American power can also be expected to cause great damage to America – is that what you want? To demonstrate this advantage, “isolationist,” decidedly unilateral actions are in turn quite useful...

[11] See GegenStandpunkt 2-94: Vom GATT zur WTO [untranslated]

[12] This sphere of global business was initially excluded from the WTO’s regulations when it was founded because no agreement could be reached on common principles. This is not surprising, given that these “services” concern the sphere of the national credit industry whose unconditional opening to foreign capital investment ultimately reduces the credit of nations to a mere plaything of international speculation. Against this, every nation has more or less effective protective mechanisms: state banks, participation regulations, stipulations as to which institutions are allowed to carry out which financial transactions, conditions for access to central bank funds, regulations on the obligation to deliver foreign currency, the outflow and inflow of monetary capital, etc. etc. Nevertheless, the WTO members had also committed themselves in principle to “liberalization” in this area. A supplementary agreement was to be concluded by mid-1995; to this end, the nations submitted offers as to how much “liberalization” of their banking and insurance systems they would agree to.

[13] The principle of “most-favored-nation” is a core principle of the modern free world market: in it, all GATT or WTO members commit themselves to granting all the rights they grant to one nation in their market to all the other WTO members as well.

[14] The Republicans, thinking positively, may have their sights on strengthening financial power with their law on the automatic reduction of the national debt, but in fact they are only putting this negative fact on the record for the time being.

[15] The example of the EEC-EC-EU clearly shows, firstly, how much state effort is needed to remove the “state” as a barrier to trade bit by bit; secondly, how much the “state-free” internal market of the partially united European state is the work of the state; it has not “stepped back” at all, but has built itself up all the more powerfully with this external border.

[16] Not only in Germany, but also in the USA, it was perceived as a minor sensation when the German VW Group made the “leap across the ocean” for the first time.

[17] The recent “Auto Summit” held under the leadership of Lower Saxony’s Minister President Schröder went as far as to exclude the so-called ‘American’ companies Opel and Ford from the “German” car market. Regardless of the fact that these are capitals that are loyal to their homeland and locked into the DM!

[18] Insofar as the argument comes from the competition, it is hypocrisy: they would like to continue to have the services of American “leadership” for the world market without having to subordinate themselves to it.

[19] The reaction of Japanese companies to the threat of sanctions shows how this works. Since the USA announced at the beginning of May that it would impose punitive tariffs retroactively to May 20 if no agreement was reached by the end of June, some companies imported as much as possible until May 20 and then stopped until the agreement was concluded. This alone led to a decline in the total imports of Japanese “luxury cars.”