Toward A New Era of Nation-States, Part II: Fifty Years of Turbocharged GlobalizationAlgis Avižienis
Author’s note: The following essay is the second part of a series of articles on developing an ideological framework for modern nationalism. The first essay, “The Promise and Reality of Globalization,” is available here. The first two essays discuss the deleterious socioeconomic effects of globalization. The third installment will deal with the ideological basis on which modern globalism rests. Alternative political ideas and principles will be introduced after sufficient analysis of current ones.
At this point, the reader might ask if the architects of globalism care at all about the economic welfare of the hard-working people of Europe and America. The globalists, having triggered worldwide energy and environmental crises by facilitating Third World industrialization on a massive scale, are now foisting costly green policies on Europeans and Americans. The trillions earmarked to wage the climate change war will burden the de-industrialized Western economies with heavier taxes and mountains of new debt. The Western oligarchs’ global ambitions are pushing the middle classes down a path leading towards scarcity.
The elites running the European Union and the United States claim they are defending the interests of their citizens, but the truth is that the EU and the US bureaucracies are merely part of the machinery designed to bring disparate parts of the globe into an economic, and later, a political union. The EU represents an intermediate phase of a much broader process of global confluence that aims to interlink the economies of Europe, North America, and the Indo-Pacific region.
Setting the stage
It would be useful to outline the beginnings of what could be termed the supercharged phase of global economic integration, which lifted off in the 1960s and began gaining momentum in the 1970s. This is not the first time that the world has witnessed a surge in international trade, finance, and investment. Economic historians occasionally refer to the period between 1870 and 1914 as the first “golden age” of globalization, which was interrupted by World War I. We will discuss this first globalization phase in a later chapter.
The second surge in globalization started in the mid-1960s with the General Agreement on Tariffs and Trade (GATT), which opened the way to ruthless elimination of national controls over international commerce. Over the following years, tariffs and other measures protecting local markets and producers were dismantled to give a powerful impetus to the unconstrained, worldwide movement of goods, capital, labor, and productive capacity.
This laid the groundwork for colossal shifts in economic relations that emerged in the following decades. International corporations needed to first establish a global free trade regime if they were to launch their subsequent massive outsourcing of production from North America and Europe to low-wage countries. The globalists would not have moved productive enterprises abroad without first creating a legal and diplomatic framework that ensured their right to export their outsourced production back to Western markets. This migration of capital and factories, often euphemistically referred to as liberalization of economic activity, proved to have highly damaging effects for millions in industrial communities throughout Europe and the US.
Western investment activity undoubtedly had a strategic/security component during the Cold War stage of turbo-charged globalization. At some point in the late 1970s, US foreign policy experts convinced Western plutocrats to invest heavily in the PRC and build its economic power so that China might become a counterbalance to the feared Soviet Union. Or was it the oligarchs who nudged US policymakers towards this outcome?
In any case, both the Western and Soviet elites diverted enormous wealth generated by their citizens to poor countries to draw the latter into their respective spheres of influence. As might be expected, there was no serious debate involving ordinary Soviet workers on sharing their wealth with countries like Cuba, Angola, or Egypt. On the other hand, Western elites were also derelict in consulting with ordinary citizens on the wisdom of building up poor countries into industrial powers. The reason for this strange coincidence is that both the Western and Soviet elites were internationalists with regard to their priorities. For them, the most important consideration was not the welfare of their citizens. Their main task was to extend their own brand of globalism over as much of the planet as their unconsulted citizens could bear.
Unilateral social dislocation
Although the corporate media are reluctant to disclose the true scale and social cost of outsourcing manufacturing activity, the appearance of extensive “rust belts” in many formerly prosperous industrial regions in the US and Europe underlines the massive dimensions of deindustrialization. According to the Economic Policy Institute, outsourcing costs America 300,000 jobs each year. Since 1997, over 91,000 manufacturing plants have closed (in large measure because of their relocation abroad), and 5 million production jobs have been lost. From the 1960s to the present, the share of manufacturing in total US employment was cut in half, from 22 percent to less than 10 percent.
In Europe, de-industrialization has proceeded at a somewhat slower pace. Nevertheless, UK trade union sources note that as many as 600,000 manufacturing positions in the UK were eliminated over the past decade. As in the US, the share of manufacturing in total UK employment also fell by half to less than 9 percent in the decades that globalization gained momentum.
A visit to any European hardware center or shopping mall will reinforce the popular consensus that most of the electronic devices, household tools, utensils, toys, clothes, and the thousands of other items that European consumers purchase daily are mostly made in China. Europeans are now beginning to see through the corporate propaganda. Facing an economic future darkened by globalization, millions have been voting for globalization skeptics like Italy’s Salvini, France’s Le Pen, and the Alternative for Germany.
Corporate economic publicists and professional economists engage in elaborate interpretations of the “pros and cons” of outsourcing, which in essence serve only to obfuscate the real issues involved. Mainstream assessments of deindustrialization studiously avoid making the connection between the “flowering” of globalization from the 1970s to the present day and the stagnating living standards of most people in the West over this same period.
Oswald Spengler on outsourcing ninety years ago
We will have more to say about declining economic prospects later, but here it would be useful to cite the words of a profound student of Western civilization. The German philosopher Oswald Spengler — who is best known for his majestic The Decline of the West, which was first published in 1918 — warned presciently about the dangers of outsourcing productive capacity and industrial know-how. Ninety years ago, Spengler made the following observations in his Man and Technics:
The immense superiority that Western Europe and North America enjoyed in the second half of the nineteenth century, in power of every kind — economic and political, military and financial — was based on an uncontested monopoly of industry. . . The role of the rest of the world was to absorb the product, and colonial policy was always, for practical purposes, directed to the opening-up of new markets and new sources of raw material, not to the development of new areas of production. . .
And then, at the close of the last [19th] century, the blind will-to-power began to make its decisive mistakes. Instead of keeping strictly to themselves the technical knowledge that constituted their greatest asset, the “white” peoples complacently offered it to all the world, in every Hochschule [higher education institution], verbally and on paper, and the astonished homage of Indians and Japanese delighted them.
The famous “dissemination of industry” set in, motivated by the idea of getting bigger profits by bringing production into the marketing area. And so, in place of the export of finished products exclusively, they began an export of secrets, processes, methods, engineers, and organizers.
And so presently the “natives” saw into our secrets, understood them, and used them to the full. Within thirty years the Japanese became technicians of the first rank, and in their war against Russia [in 1904-05] they revealed a technical superiority from which their teachers were able to learn many lessons.
Today more or less everywhere — in the Far East, India, South America, South Africa — industrial regions are in being, or coming into being, which, owing to their low scales of wages, will face us with a deadly competition. The unassailable privileges of the white races have been thrown away, squandered, betrayed.
The others have caught up with their instructors. Possibly — with their combination of “native” cunning and the over-ripe intelligence of their ancient civilizations — they have surpassed them. Where there is coal, or oil, or water-power, there a new weapon can be forged. . .
The exploited world is beginning to take its revenge on its lords. The innumerable hands of the coloured races — at least as clever, and far less exigent — will shatter the economic organization of the whites at its foundations. The accustomed luxury of the white workman, in comparison with the coolie, will be his doom.
Many contemporaries of Spengler dismissed his forebodings concerning the rise of non-Western nations as exaggerated fears. Ninety years after the publication of Man and Technics, however, we can only marvel at Spengler’s insightfulness, as the West grapples with the consequences of China’s ascent. Reading Spengler’s long-term interpretations of historical processes, we can better comprehend the overarching implications of globalization on Western living standards.
Post-war prosperity driven by cheap petroleum
Spengler’s warnings about the fragility of Western living standards only assumed concrete reality four decades after the publication of Man and Technics. First, the West was to experience a blossoming of post-war consumerism. The US and Western European countries achieved unprecedented levels of prosperity from about 1950 to 1973 (the year of the first Arab oil boycott). Unfortunately, much of this material abundance — such as the appearance of hundreds of millions of private automobiles and millions of new homes in the spreading suburbs — rested on the ruthless exploitation of natural resources, especially petroleum. Economic activity could expand for several decades, unburdened by costly energy. The ill effects of turbocharged globalization had not yet become apparent.
During this boom, oil prices remained at a range of 20-26 USD per barrel (measured in current USD), which many experts consider optimal for a buoyant economy. From 1950 to 1960, the first decade of post-war affluence, GDP growth in Western countries remained strong and at times exceeded 5-6 percent annually. From 1960 to 1970, GDP increased at slightly lower rates, but still remained historically high at 4-5 percent per year.
Annual increases of GDP slowed considerably after the first oil boycott of 1973, subsequently hovering in a range between 3-4 percent. An important reason for this decline was the tripling of petroleum prices. In 1978, following yet another war in the Middle East, the oil price shot up again — this time by 200 percent. As could be anticipated, the price shock caused a very painful economic contraction that lasted several years. GDP growth eventually resumed, but at slower rates, barely rising higher than 3 percent per year.
Chinese demand puts heavy pressure on energy prices
By then, the globalists’ investment and lending activities in the so-called developing countries were contributing to significant increases in global demand for energy. The industrialization of the PRC triggered an explosive rise in Chinese demand for oil during the decade following the year 2000. This led to the record surge in oil prices to 147 USD per barrel in 2008 — and yet another recession hit the Western countries. Economic activity eventually rebounded, but increases in GDP slid appreciably from 2010 to 2020, barely exceeding 1 percent annually in the economically advanced European countries.
It is important to bear in mind that maintaining even this frail GDP growth required massive government and private borrowing. In other words, once the cost of petroleum rose several times higher than the previously indicated optimal levels, consumption could only be sustained by piling on debt. The US, Japan, France, Italy, and Spain began accumulating government and private debts at ever faster rates. The level of indebtedness of all these states now exceeds 100 percent of their yearly GDP.
We can now appreciate how globalization has squeezed the working and middle classes of the West in at least two important respects. On the one hand, the diversion of US and Western European capital to the Third World, measured in trillions of USD, helped power a surge in industrial development in the emerging economies. This massive transfer of wealth triggered huge increases in energy use globally, and, as a consequence, petroleum became an expensive commodity. The disappearance of cheap oil, which had upheld the post-war prosperity of the West until 1973, has since then put a serious damper on GDP growth in Europe and the US.
At the same time, the outsourcing of tens of thousands of manufacturing plants to developing countries has eliminated millions of well-paid positions in the West. The rising service sector, which the corporate media and academics tout as the antidote to deindustrialization, has generated much smaller wages than production employment. Millions of US voters supported Donald Trump in the 2016 Presidential election because they disagreed with the orthodox view that a growing service sector would make deindustrialization irrelevant to concerns about declining material welfare.
Sinking economic standards decimate Western demographic prospects
The gradual decline in economic fortunes that we have traced over the past half-century has coincided with an alarming weakening of the demographic potential of Western countries. The number of deaths in Europe has consistently exceeded the number of births during these 50 years of hyper-globalization.
Young people generally want to bring children into the world when there is widespread confidence in the future. The end of World War II ushered in such an optimistic atmosphere that helped produce the baby boom, during which the number of live births exceeded deaths for a sustained period. In the US, post-war prosperity allowed working- and middle-class people to raise large families, purchase private homes, buy cars, and send their children to college — all at a reasonable cost without crushing debt and often with only one family member earning a wage. Families with two or three children were a common sight in the US and Western Europe during the post-war era of plenty.
One vital requirement for starting a family is the availability of affordable housing. Unfortunately, this is one dimension of economic well-being that the globalized economies of the West are clearly failing to deliver. Although mainstream economic analysts manipulate economic data masterfully to create the impression that we are still relatively affluent, the reality is that in the US about 52 percent of young adults up to the age of 30 still live with their parents. The European statistics are about as dismal as those for America.
The corporate media are skilled in painting cheerful pictures of happy consumers enjoying the benefits of inexpensive household appliances, personal computers, and marvelously versatile telephones. But owning a home or an apartment without having to pay half of one’s income for rent is a prospect that eludes more and more young people.
Patrick Buchanan’s The Death of the West
According to the US author Patrick Buchanan, European countries are dying. Buchanan sounded the alarm in 2002, in his book The Death of the West, which graphically illustrates the disastrous demographic trends of countries in Europe and the West in general. Making use of UN data, Buchanan warns that if the decades-long negative birth rates continue, all of Europe from Iceland to Russia will contract from 728 to 556 million inhabitants by about 2040.
Over another 50 years, only 207 million Europeans would be left, which is less than a third of the present population. Europe has never experienced such a period of demographic collapse, save for the Black Death epidemic of the Middle Ages that carried away one-third of the continent‘s inhabitants.
The consequences of negative birth rates are no longer a distant threat to be waved away by superficial observers. They are making themselves felt even now. During the 2008-2009 financial crisis, Greece, Spain, Portugal, Italy, and France slashed social welfare payments not only because their financial systems were in poor condition, but also on account of unfavorable demographic tendencies. In practically all Western countries, health and pension payments are becoming a growing burden because the ratio of working-age to retirement-age populations is steadily worsening. If present trends are not reversed, a third of the people born in Europe will be older than 60 years by 2050.
Globalist mass immigration as the panacea for a graying Europe
As the average statistical age of Europeans increases, so too does the flow of illegal and legal immigration. In 1999, half a million illegal immigrants arrived in the EU countries, which was ten times greater than the inflow of 1993. In the summer of 2015, German Chancellor Angela Merkel, without warning, signaled that her country was ready to welcome practically unlimited numbers of real or presumed refugees. News of this incredible prospect for economic advancement spread like wildfire over many impoverished countries, and Germany unsurprisingly was inundated with an influx of 1.3 million destitute immigrants from Asia and Africa.
Many observers thought that Merkel’s actions were ill-considered or worse, given the massive problems and expenses that German authorities were immediately confronted with in providing the immigrants with housing, health services, welfare payments, and schools for their children. In actual fact, Merkel and the EU elites welcomed this development, as it rather unexpectedly moved forward their agenda for facilitating mass immigration into the EU.
The UN statistical reports that Buchanan cites, the EU recommendations on the subject, and the general tenor of media discussion of this issue generally point in one direction. The key problem highlighted is the alleged economic necessity of keeping the ratio between working-age and pension-age people relatively stable. According to these orthodox experts, the only way of doing this is to permit unprecedented levels of immigration. If Europe is to maintain the current 5 to 1 ratio of working-age to pension-age inhabitants up to the year 2050, then it supposedly must facilitate an immigration of hundreds of millions of working-age people from the Third World.
Only Africa and the Middle East countries can be expected to provide such a huge quantity of “human resources” that the UN and EU population experts believe Europe requires. In summarizing the problem, Buchanan concludes that either Europeans will be forced to radically downgrade the quality of their pension systems or the Old Continent will become a part of the Third World. All indications are that the European elites have resigned themselves to the latter course.
A third alternative — namely, a program of massive support for young families, combined with measures to increase youth employment opportunities — is not included among the policy options under serious consideration by the globalists or the UN and EU apparatchiks. Some of the more radical members of various green parties and movements are advocating the thesis that the citizens of wealthy countries should abstain from raising children as a sacrifice they can make in the climate change war, since children will grow up and only add to population pressure on the environment.
Neglected state support for young families
The demographic collapse of Europe is the gravest issue confronting our future. The graying of Europe is already weighing heavily on prospects for economic growth, the solvency of welfare systems, and defense capabilities.
If young Europeans are looking for a common challenge, a sense of general purpose, and an outlet for their altruism, then the globalists’ war on climate change is not the issue that will satisfy their longings. The green agenda is a red herring and must be exposed as such. The main reason that Europeans are being pushed to sacrifice their material well-being is the globalists’ need to somehow lessen the pressure on world energy prices. If the Western countries can be induced to further reduce their consumption levels, then the globalization enterprise of industrializing the Third World can continue for a while. If energy prices rise too much, then this ill-conceived project of shipping commodities over thousands of miles from distant factories to stores will come to a standstill.
The real challenge for Europe is demographic collapse. What Europe needs is a solid commitment by the state to help young people decide on raising children without worrying about a descent into poverty. The rising Green Party of Germany is heavily supported by young people up to the age of 30, who are ginned up by the thrilling prospect of saving the planet’s ecosystem though greater international cooperation. It should be the task of European patriotic movements to demonstrate that it is precisely the internationalists’ commitment to equalize economic conditions in the world that is a major reason why we are facing a climate crisis.
European patriots should call for policies that stop the hemorrhaging of national wealth abroad, return manufacturing activity to Europe, support local producers and give young people material incentives to start families. The governments of Poland and Hungary have made some determined moves in this direction, particularly regarding assistance to young families, and the political results of these positions have been very good for the ruling parties. There is no reason to doubt that the Western European “populists” should embrace similar policies. Nationalists could take away the greens’ youth electorate by showing that they care about the specific, unmet needs of young voters.
True to form, the globalists probably will oppose serious pro-natalist programs, fearing that they might strengthen patriotic sentiments and national cohesion, while also diluting international solidarity. It would be logical for the countries providing generous support to families to expect that these recipients of aid would reciprocate by living and working for the benefit of their nations, instead of emigrating.
Poland and Hungary face huge problems with youth emigration, which is one important reason for the strong support that both countries offer to their young co-nationals. The success of the pro-natalist policies of these two East-Central European countries will not be welcomed by the Western European internationalists, who are counting on a continuing immigration of working-age people from the East.
Although the demographic picture Patrick Buchanan painted is a depressing one, there is a positive side to the bad news. At least Buchanan’s numbers and prognoses show us with striking clarity the vision dreamed up by the globalists — namely the gradual union of the EU with Africa and the Middle East.
Mass immigration suppresses European and North American incomes
One other important reason for the stagnation in incomes of ordinary people in Europe and the US is mass immigration, which the globalist elites support for financial as well as ideological reasons. Although the one-world architects have registered remarkable achievements in facilitating the so-called free movement of commodities and capital, they remain unsatisfied with what mainstream commentary refers to progress in liberalizing the movement of labor on a global scale.
Those who plan and work on unifying mankind ultimately conceive of a globalized mass of people no longer separated by significant ideological, racial, national, cultural, and economic differences. The basic idea is that homogenization facilitates unity. Thus, the removal of the distinctions underlying group identity eliminates the solidarity of associations. Disorganized, atomized people are much easier to manage. Thus, the globalists are waging a relentless ideological war against all varieties of nationalism.
The creation of a single global market lays the groundwork for this process of homogenizing humanity. Already, Lithuanians can see that a major part of the Chinese workforce earns more than the average Lithuanian worker. Fifty years ago, Lithuanians were accustomed to think of China as a country of extreme poverty, while they at least had the basic amenities of civilized life.
In the rest of the world, globalization has tended towards a slow, but gradual equalization of standards and wage levels. In fact, European and American employees are constantly reminded — perhaps warned or threatened would be more appropriate words — that they must be globally competitive if they want their companies to maintain market share. In practice, however, this means that European and US workers must look on as their real incomes slowly approach Third World levels, while Third World incomes creep up toward European or US levels.
It is significant that the multilateralists are gradually introducing into public discussion a new element of what constitutes human rights, namely, the recently-invented right that all people everywhere should be able to freely choose their country of residence. The UN Global Compact for Safe, Orderly, and Regular Migration is supposedly non-binding, but it contains no less than 50 references to the signatory countries’ obligations to provide migrants with living and working opportunities that are equal to those of the receiving nation’s citizens.
Each year millions of poor migrants come to the EU or the US and compete for a stagnating pool of jobs with local workers. The globalist elites welcome mass migration of economic migrants, and they are working towards facilitating this homogenization process. Mass migration limits wage growth and helps boost company profits. But over time, migration may transform European nations into immigrant societies lacking the ethnic bond of solidarity to defend them against further inroads on their sovereignty and cultural distinctness.
The super-rich appropriate ever greater shares of wealth for themselves
So far we have discussed several aspects of the decline of living standards that globalization has palmed off on the average citizens of the US and Europe. But it is also crucial to understand that globalization has been a godsend for the very top of the financial pyramid. Outsourcing production to countries where working people only earn several USD per day can be exceedingly profitable, particularly if the production from the relocated enterprises is exported back to Western markets.
The elimination of national controls on the movement of capital abroad — which is also a vital element of the globalization project — has opened the gates to widespread evasion of taxes through the agency of offshore accounts. Studies show that as much as 10 percent of global GDP is hidden in tax havens for the benefit of the super-rich. Since total global wealth is estimated to amount to 400 trillion USD, we can see that we are talking about roughly 40 trillion USD that the planet’s wealthiest inhabitants have removed from their home countries. As a result, tax revenues are significantly compromised, meaning that more of the tax burden falls on the middle classes.
Concentrated wealth translates into concentrated political power
The extreme concentration of wealth and political power that drives globalization and in turn feeds the super-wealthy has gravely undermined the capacity of communities to sustain organized opposition to its excesses. Neither the press nor the major political parties of Western democracies seriously oppose the progressive misappropriation of a community’s wealth by the financial and corporate elites because the media and political parties are owned or financed by the super-rich.
In 1983, fifty major corporations dominated the Western world’s media. Nearly forty years on, consolidation has reduced this number to about ten. The result is the propagation of a worldview that is uniformly corporatist and internationalist.
The super-rich are out of control. As the financial and political power of the super-rich balloons, so does their appetite for more wealth. If the directors of major Western corporations were generally satisfied with yearly salaries of up to one million USD in the 1970s, then in the 1980s the maximum rates had reached 40 million USD. By the 1990s, the top salary levels had already exceeded 100 million USD, and in 2019, at least half a dozen US executives were earning about 100 million USD a year or slightly more. In the same year, Elon Musk of Tesla Inc. received a yearly salary amounting to almost 600 million USD.
The heads of US corporations are currently paid approximately 400 times more than workers with an average income. By contrast, in the 1960s, the top company heads were less greedy, receiving “only” 30 times more than average wage earners. Statistics available in 2019 show that executive officers of private corporations made 940 percent more than they were earning 40 years ago. During the same period, middle-income workers were paid only 12 percent more than in the early 1980s, although health care and education costs had exploded in the meantime.
Although European banking executives and corporate chiefs are not rewarded as extravagantly as in the US, American business institutions set the tone for what constitutes fair compensation for economic performance. The more egalitarian traditions of European national governments dampen income inequality in Europe, but the overall trend is toward a global standard of gross aggrandizement.
Measured in global terms, the proportion of the entire planet’s wealth owned by the richest one percent amounts to 45 percent. Since the 1970s, this concentration of economic assets has been accelerating. If present-day trends continue, some analysts expect that the world’s most affluent 1 percent will be in possession of 66 percent of global wealth by 2030. Since 1989, the top one percent of US residents increased their assets by 21 trillion USD, while during the same period the lower 50 percent lost 900 billion USD in wealth.
Having analyzed the deleterious impact of 50 years of globalization on economic and social conditions in the West, we can proceed in the next chapter to a discussion of alternative ideas, values, and principles. The best way to escape from the clutches of the one-world fanatics is to identify the weakest points in their propaganda armor and subject these to analytical criticism. But it is not enough to be an anti-globalist. European patriots must develop and agree on an alternative ideological framework, a positive program for action, which will guide them in confronting the harsh realities of the coming decades.
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