NetNews Usenet Archive 1992 #30/NN_1992_30.iso/spool/misc/activism/progress/9254

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Subject: Cost of Empire
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{From THE SWORD AND THE DOLLAR: Imperialism, Revolution, and the
Arms Race, by Michael Parenti, St. Martins Press, 1989}

THE COST OF EMPIRE (pg 74-81)

Let us consider in more detail what it costs to maintain "our"
military-industrial global empire. If you are an unemployed
worker whose plant has just moved to South Korea or Brazil or
Indonesia in pursuit of higher profits, the first thing that
might come to mind is the number of jobs "our" empire has cost
us. As early as 1916, Lenin pointed out that at an advanced stage
capitalism would export not only its goods but its very capital,
not only its products but its entire production process. Today,
most giant American firms do just that, exporting their capital,
their technology, factories, and sales networks. It is well known
that General Motors has been closing down factories in the USA;
less well known is that GM has been spending billons of dollars
abroad on new auto plants in countries where wages are far less
than what American autoworkers are paid. This means bigger
profits for GM but more unemployment for Detroit.

Over the last twenty years, American firms have tripled their
total outlay in other countires, with the fastest growth rate
being in the Third World. Nor is the trend likely to reverse
itself. American capitalism is now producing abroad eight times
more than it exports. Many firms have shifted all their
manufacturing activities to foreign lands: all the tape
recorders, radios, bicycles, VCRs, typewriters, television sets,
and computers. One out of every three workers employed by US
multinational companies are now in foreign countries. US
companies continue to export US jobs to other countries at an
alarming rate: 900,000 between 1980 and 1985, 250,000 of these in
1985 alone. [This book was published in 89 and the export of jobs
has accelerated since 85...HR] Thus do the working people of the
United States pay the hidden costs of empire.

Multinationals do not have to pay US income taxes on profits made
in other countries until these profits are repatriated to the
USA---if ever they are. Taxes paid to the host country are
treated as tax credits rather than mere tax deductions, that is,
write-offs from the taxes that would normally have to be paid to
the US Treasury rather than from the income that is taxable. The
miultinational can juggle the books among its various foreign
subsidiaries, showing low profits in a high-tax country and high
profits in a low-tax country so as to avoid paying substantial
taxes anywhere.

Management's threat to relocate a plant is often sufficient to
blackmail US workers into taking wage cuts, surrendering
benefits, working longer hours, and even putting up money of
their own for new plants and retooling---all of which represent a
net transfer of income from workers to owners.

Americans are victimized by economic imperialism not only as
workers but as taxpayers and consumers. The billions of tax
dollars that corporations escape paying because of their overseas
shelters must be made up by the rest of us. Additonal billions
of our tax dollars go into foreign-aid programs to governments
that maintain the cheap labor markets that lure away American
jobs---$13.6 billion in 1986, of which two-thirds was military
aid. Our tax money also serves as hidden subsidies to the big
companies when used as foreign aid to finance the kind of
infrastructure  (roads, plants, ports) needed to support
extractive industries in the Third World.

Nor do the benefits of this empire trickle down to the American
consumer in any appreciable way. Generally the big companies
sell the goods made abroad at as high a price as possible on
American marekts. Corporations move to Asia and Africa to
increase their profits, not to produce lower-priced goods that
will save money for American consumers. They pay as little as
they can in wages abroad but still charge as much as they can
when they sell the goods at home.

>From one-half to two-thirds of the major winter and early spring
vegetales consumed in the United States are imported from poor
countries, pricipally Mexico, where the land and labor cost a
fraction of what they do in the USA. Yet these vegetables are not
sold at cheaper prices than homegrown produce. Likewise, the
General Electric household appliances made by young women in
South Korea and Singapore who work for subsistence wages, and the
Admiral International color television sets assembled by low-paid
workers in Taiwan do not cost less than when they were made in
the USA. As the president of Admiral noted, the move to Taiwan
"won't affect pricing state-side but it should improve the
company's profit structure, otherwise we woudn't be making the
move."

We already noted how overseas investments have brought increasing
misery to the Third World. Of interest here is how some of that
misery comes home as a visitation upon the American people. We
have heard much in our media about the "refugees from Communism";
we might think a moment about the refugees from capitalism.
Driven off their lands, large numbers of impoverished Latinos and
other Third Worlders have been compelled to flee into economic
exile, coming to the United States, many of them illegally, to
compete with American workers for entry-level jobs that are
becoming increasingly scarce. Because of their illegal status and
vulnerability to deportation, undocumented workers are least
likely to unionize and least able to fight for improvements in
work conditions. So they serve as a reserve army of labor,
further depressing the wage market for American workers.

Not all immigrants are impoverished, unskilled workers. Harsh
economic conditions in many nations tend to encourage the exodus
of the younger and more educated without whom development is
impossible. The result is "brain drain," as the rich nations
siphon off the trained talent and skills of the poor nations,
further adding to the differential between rich and poor
countries and to the downward spiral of the Third World.

Othere injustices inflicted by the empire upon poorer nations
come home to take a toll upon ordinary AMericans. For years now
the poisonous pesticides and hazardous pharmaceuticals that were
banned in this country have been sold by their producers to Third
World nations where regulations are weaker or nonexistent. (In
1981, President Reagan repealed an executive order signed a half-
year before by President Carter that would have forced exporters
of such products to notify the recipient nation that the
commodity was banned in the USA.) Wit an assured export market,
these poisons continue to cripple workers in the American
chemical plants where they are made, and then reappear on our
dinner table sin the fruit, vegetables, meat, and coffee we
import. These products also have been poisoning people in Third
World countries, creating a legacy of sickness and death that is
starting to backfire on us.

The absence of environmental protections throughout most of the
Third World affects the health and welfare of Americans in orther
ways (along with the well-being of other peoples and the earth's
entire ecology). The chimical toxins and other industrial
effusions poured into the world's rivers, oceans, and atmosphere
by fast-profit, unrestricted multinational corporations operating
in Asia, Africa, and Latin America, and the devastation of Third
World lands by mining and timber companies and by agribusiness,
are seriously affecting the quality of the air we all breathe,
the water we all drink and the food we all eat. Ecology knows no
national boundaries. The search for cheap farmland to raise
cattle induces US companies to cut down rain forests throughout
Central America. The nutrient-poor top soil is soon depleted and
the land deteriorates from luch jungle into scraggly desert. Then
the cattle-raisers move on to other forest. The tropical rain
forests in Central America and the much vaster ones in the Amazon
basis are being destroyed at an alarming rate and may be totally
obliterated witin the next two decades. Over 25 percent of our
prescription drugs are derived from rain forest plants. Rain
forests are the winter home for millions of migratory North
American songbirds--of which declining numbers are returning from
Central America. Many of these birds are essential to pest
control.

The dumping of industrial effusions and radioactive wastes also
may be killing our oceans. If the oceans die, so do we, since
they produce most of the earth's oxygen. Over half the world's
forests are gone compared to earlier centuries. The forests are
nature's main means of removing carbon dioxide from the
atmosphere. Today, the carbon dioxide buildup is transforming the
chemical composition of the earth's atmosphere, accelerating the
"greenhouse effect" by melting the earth's polar ice caps and
causing a variety of other climatic destabilizations. While the
imperialists are free to roam the world and plunder it at will,
we are left to suffer the immediate and long-term consequences.

Additonal ways that the empire strikes back home: the narcotics
that victimize whole segments of our population are shipped in
through secret international carels linked to past and present
CIA operatives. Large-scale drug trafficking has been associated
with CIA-supported covert wars in Cuba, Southeast Asia, and
Central Aemrica. As of 1988, evidence was mounting linking the
US-backed Nicaraguan counterrevolutionaries to a network of
narcotics smuggling that stretched "from cocaine plantations in
Columbia to dire airstrips in Costa Rica, to pseudo-seafood
companies in Miami, and, finally, to the drug-ridden streets of
our society.

The empire victimizes its own people in other grim ways.
Thousands of Army veterans exposed to nuclear tests after World
War II are now dying of cancer. Vietnam veterans who came back
contaminated by the tons of herbicides spracyed on Indochina are
facing premature death from cancer, while their children have
suffered an abnormally high rate of birth defects (in common with
the children of Vietnam). The US military has experimented on
Americans with its chemical and bacteriological warfare methods.
The Navy sprayed bacteria in San Francisco in 1950, an experiment
that has since been implicated in the illness of several
residents and death of at least one person. In 1955, the CIA
conducted a biological warfare test in Tampa Bay area, soon after
which twelve people died in a whooping cough epidemic. In the
1950s and 1960s, biological warfare tests were done in various
cities including St. Louis and New York, using bacilli that were
known to be infectious but supposedly not fatal.

Empire has a great many overhead costs, especially military ones,
that must be picked up by the people. The Vietnam War cost $168.1
billion in direct expenditures for US forces and military aid to
allies in Indochina. The war's indirect costs will come to well
over $350 billion (for veterans benefits and hospitals, interest
on the natinal debt, etc.). As the economist Victor Perlo pointed
out, by the end of the war inflation had escalated from about 1
percent a year to 10 percent; the national debt had doubled over
the 1964 level; the federal budget showed record deficits;
unemployment had doubled; real wages had started on their longest
decline in modern American history; interest rates rose to 10
percent and higher; the US export surplus gave way to an import
surpolus; and US gold and monetary reserves had been drained.
There were human costs; 2.5 million Americans had their lives
interrupted to serve in Indochina; of these 58,156 were killed
and 303,616 wounded (13,167 with a 100 percent disability);
55,000 have died since returning home because of suicides,
murders, additictions, alcoholism, and accidents; 500,000 have
attempted suicide since coming back to the USA. Ethnic minorities
paid a disproportionate cost; thus while composing about 12
percent of the US population, Blacks accounted for 22.4 percent
of all combat deaths in Vietnam in 1965. The New Mexico state
legislature noted that Mexican Americans constituted only 29
percent of that state's population but 69 percent of the state's
inductees and 43 percent of its Vietnam casualties in 1966.

Americans pay dearly for "our" global military apparatus. The
cost of building one aircraft carrier could feed several million
of the poorest, hungriest children in America for ten years.
Greater sums have been budgeted for the development of the Navy's
submarine rescue vehicle than for occupational safety, public
libraries, and day care centers combined. The cost of military
aircraft components and ammunition kept in storage by the
Pentagon is greater than the combined costs of pollution control,
conservation, community development, housing, occupational
safety, and mass transportation. The total expenses of the
legislative and judiciary branches and all the regulatory
commissions combined constitute little more than half of 1
percent of the Pentagon's yearly budget.

Then there is the distortion of American science and technology
as 70 percent of federal research and development (R&D) funds go
to the military. Contrary to Pentagon claims, what the military
produces in R&D has very little spin-off for the civilian market.
About one-third of all American scientists and engineers are
involved in military projects, creating a serious brain drain for
the civilian sector. The United States is losing out in pricisely
those industries in which miliaty spending is concentrated, to
foreign competititors who are not burdened by heavily militarized
economies. For instance, the US machine-tool industry once
dominated the world market. But since so much of the industry has
been absorbed by the military, foreign imports have increased
six-folded and now account for more than a third of domestic
civilian consumption. The same pattern has been evident in the
aerospace and electronics industries, two other areas of
concentrated military investment.

    Benefits of military R&D to the civilian economy have been
    small and are declining as military technology becomes
    increasingly specialized and exotic. The rapid expansion of
    military research diverts rexources from the civilian economy and
    retards U.S. economic growth and competititiveness in world
    markets. The few industries that have benefited from military
    research would be far better off if the money had been spent
    entirely on commercial research.

The pattern of distorion will worsen if the Star Warriors have
their way. The estimates for the Strategic Defense Initiative
("star wars") are stratospheric indeed, as much as several
trillion dollars. The cost to the rest of the economy---as
measured by the military aabsorption of scientific talent, the
loss of export markets, and the competitive disadvantage of
civilian R&D is even harder to calculate.

In his eight years in office President Reagan spent upwards of $2
trillion on the military. Sums of this magnitude crate an
enormous tax burden for the American people who, as of 1988,
carried a national debt of $2.5 trillion, or more than twice the
debt of the entire Thrid World. Furthermore, Americans must
endure the neglect of environmental needs, the decay and
financial involvency of our cities, the deterioration of our
transportation, education, and health-care systems, and the
devastating effects of underempoyment upon millions of households
and hundreds of communities.

In additon, there are the frightful social and psychological
costs, the discouragement and decline of public morale, the
anger, cynicism, and suffering of the poor and not-so-poor, the
militarization and violence of popular culture and the potential
application of increasingly authoritarian solutions to our social
problems.

Poverty can be found in the rich industrial nations as well as
the Third World. In the richest of them all, the United States,
those living below the poverty level grew in the 1981-86 period
from 24 million to almost 35 million, according to the
government's own figures, which many consider to be
underestimations---thus making the poor the fastest growing
social group in the USA. In 1986, the House Select Committee on
Hunger found that Kwashiorkor and marasmus diseases, caused by
severe protein and calorie deficiences and usually seen only in
Third World countries, could be found in the United States, along
with rising rates of infant mortality in poor areas.

Those regions within the United States that serve as surpolus
labor reserves or "internal colonies," such as Appalachia, poor
Black and Latino communities, Eskimo Alaska, and Native American
Indian lands, manifest sysmptoms of Third World colonization,
including chronic underemployment, hunger, inadequate income, low
levels of educaiton, inferior or nonexistent human services,
absentee ownership, and extratction of profits form the
indigenous community. In additon, the loss of skilled, higher-
paying manufacturing jobs, traditionally held by White males, has
taken its toll of working class White communites as well. So when
we talk of "rich nations" and "poor nations" we must not forget
that there are millions of poor in the rich nations and thousands
of rich in the poor ones. As goes the verse by Bertolt Brecht:

  There were conquerors and conquered.
  Among the conquered the common people starved.
  Among the conquerors the common people starved too.

As in Rome of old and in every empire since, the center is bled
in order to fortify the periphery. The lives and treasure of the
people are squandered so that patricians might pursue their far-
off plunder.

-----------------------------------------------------------------
Michael Parenti has been a major voice among progressives for
more than 30 years. He received his Ph.D from Yeale in 1964, and
has since taught at several colleges and universities, including
the State University of New York at Stony Brook and at Albany,
Sarah Lawrence College, the University of Vermont, Brooklyn
College of the City University of New York, and Howard
University. The author of DEMOCRACY FOR THE FEW, POWER AND THE
POWERLESS, and INVENTING REALITY:The Politics of the MAss Media--
-all published by St. Martin's PRess--Parenti regular appears on
radio and television programs and lectures frequently at college
campuses around the country.
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