Ben Bernanke and Global Economic Integration

Our Fed Reserve chair, Ben Bernanke, delivered a speech in front of elite bankers, describing the ushering in of a new period of a greater labor market that can be put to use (exploited) by the transnational corporations that have found a way to bypass the well-organized manufacturing workers and unions in the United States. Let us read what Bernanke told the bankers in 2006.

“One of the defining characteristics of the world in which we now live is that, by most economically relevant measures, distances are shrinking rapidly. The shrinking globe has been a major source of the powerful wave of worldwide economic integration and increased economic interdependence that we are currently experiencing. The causes and implications of declining economic distances and increased economic integration are, of course, the subject of this conference.”

Bernanke describes the process at which modern technology allows transnational corporations to expand their production (principally production, secondary sales) to low-wage, third-world countries. That is the principal objective of economic interdependence. We are not only talking about greater geographic integration but also economic integration with a smaller number of corporate giants controlling most of the global trade (I believe it is an interlocking network of 143 corporations or so). The key role of technology is very peculiar. It serves as a labor-saving technology at the same time as it increases the work burden among the countries people that can still be exploited with few labor standards, which hopefully is on the verge of changing. The home-grown working class in the United States is driven into ever-greater patriotic positions that conveniently assert that the manufacturing jobs that have brought prosperity to this country (not entirely, it was union organization and collective bargaining, which made those industry jobs desirable) can simply be returned here at higher labor cost. The solution of the globalized movement of capital, what Bernanke called “integration”, is a globalized working class movement.

It is nice and important to have NGOs and other left-wing groups protest in G-20 summits, and also to have Occupy Wall Street, which manifest the growing anger of the people against the establishment, but it is even more important to understand what the battle plan for the labor movement is: to internationally organize, to demand the retention of manufacturing jobs in the United States and improvement of labor standards in the service sector coupled with the drive to strengthen labor organizations in the developing countries to raise the standard of living over there. One thing capitalism does very good is to increase output, productivity and wealth. One thing it does not do is to make the fruits of labor equitably distributed and environmentally sustainable.

The unsustainable contradictions embedded within capitalism is in open display in the reckless manner at which the Greeks, Italians, Portuguese and Spanish are tortured for their quickly amassing debt load. The return of capital investments for the Wall Street gamblers is endangered precisely because they have accumulated almost all of the fruits of labor of the working people in this world, and then with the claim to private property lend out this surplus to private individuals and governments, so that in a fearful moment of over-lending they can chastise the profligacy of government spending. Without an effective counter-balance by a reawakened global labor movement cutting across cultures, races and nationalities, I see little hope of restoring equilibrium.

Even Ben Bernanke, who understands the sentiment of Occupy Wall Street, is writing in trepidation and excitement. “Further progress in global economic integration should not be taken for granted, however. Geopolitical concerns, including international tensions and the risks of terrorism, already constrain the pace of worldwide economic integration and may do so even more in the future. And, as in the past, the social and political opposition to openness can be strong. Although this opposition has many sources, I have suggested that much of it arises because changes in the patterns of production are likely to threaten the livelihoods of some workers and the profits of some firms, even when these changes lead to greater productivity and output overall. The natural reaction of those so affected is to resist change, for example, by seeking the passage of protectionist measures. The challenge for policymakers is to ensure that the benefits of global economic integration are sufficiently widely shared–for example, by helping displaced workers get the necessary training to take advantage of new opportunities–that a consensus for welfare-enhancing change can be obtained. Building such a consensus may be far from easy, at both the national and the global levels. However, the effort is well worth making, as the potential benefits of increased global economic integration are large indeed.”

On a concluding remark, what Bernanke refers to as global economic integration is, of course, the presumption that the total dominance and reach of transnational corporations is extended, whereas I interpret this to mean the greater class consciousness of the working people subjected to this economic dynamics with the power to disrupt the global process of production and shape policies more according to their own needs and interests.

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