Monday, July 1, 2019

Monopoly Crisis?

An interesting piece from  Matt Stoller and Lucas Kunce at TAC with symptomatic title: America’s Monopoly Crisis Hits the Military. It is a fairly long and substantive piece--I mean it makes the case, certainly. Even I somewhere here discussed China's penetration of the US semi-conductor market, including in military field. The authors make this observation:

Who are these stockholders that CEOs are so compelled to answer to? Oftentimes, China. Jennifer M. Harris, an expert in global markets with experience at the U.S. State Department and the U.S. National Intelligence Council, researched a recent explosion of Chinese strategic investment in American technology companies. She found that China has systematically targeted U.S. greenfield investments, “technology goods (especially semiconductors), R&D networks, and advanced manufacturing.” The trend accelerated, until the recent flare-up of tensions between the United States and China. “China’s foreign direct investment (FDI) stock in the U.S. increased some 800% between 2009 and 2015,” she wrote. Then, from 2015 to 2017, “Chinese FDI in the U.S. …climbed nearly four-fold, reaching roughly $45.6 billion in 2016, up from just $12.8 billion in 2014.” This investment runs right through Wall Street, the key lobbying group trying to ratchet down Trump’s tough negotiating posture with the Chinese. Rather than showing concern about the increasing influence of a foreign power in our commerce and industry, Wall Street banks have repeatedly followed Archie Cox down the path of easy returns.
And while I agree to a degree that monopolies are not necessarily good in many respects, the focus should be on what is highlighted in yellow. Yes, one may create and then tweak all kinds of legislative and financial instruments in order to decrease "the influence of a foreign power"--enough to take a look at Russia's program of import substitution. But in the American case we immediately encounter a purely, not just economic capitalist sense with US selling to China the rope by which she is being hanged, to rephrase Marx. The issue is the culture--the United States simply lacks all required cultural pressures to make the whole thing work. Yes, yes, monopolies--I get it. Try now to explain to most US "elites" what the real war is. Good luck doing this--there is no culture of grasping it. Only US military people, and even then, not all of them, can and do contemplate what is going to happen to them, to their families, property, things they love in case of real serious war. US collective memory has no recollection of massive bombing of Chicago, of the rape of women near Boston, concentration camps, and other manifestations of real war. 

That's the problem--nobody realistically believes that China or Russia will conduct massive amphibious landings at the Pacific Northwest Coast or around Tampa to kill, rape, pillage Americans. There is no land invasion threat to the United States--there never realistically was and that is the factor which plays huge disjointing role in both American mentality and the way business is conducted in military-technological field. In other words, the United States is not really under ANY serious pressure to produce top-notch defensive weapons. Of course, whipping oneself into constant paranoid frenzy of seeing military threat everywhere can work, but only so far, in the end--one has to grow up with shared historic memory of Chicago burning in Japanese bombing raids and Wehrmacht landing on the beaches of South Carolina to really FEEL THE NEED to give it a proper attitude beyond the limits of financial enrichment and bragging. I will quote myself from my first book:
War, a bloody and gory midwife of a nation’s cohesion, largely spared the United States and the American obsession with weapons can be viewed in part as a longing for a missing formative factor of most modern nations. It is in this field of weapons design and manufacturing that the United States ultimately sees the extension of its own self and needs a constant validation of itself as a global superpower. 
So, while piece on monopolies is worth reading and contemplating, the answer lies, to a very large degree, in a cultural field and there is no escaping it. And then, of course, Russia's military does it all through monopolies--Rostec anyone? It does it all and, let's face it, some of the military technologies they produce are amazing and they work because they are produced within militarily totally different cultural environment. Again, quoting myself:
For a nation with such a military history as Russia’s the issue of military technology is an issue of survival. As such, weapons in Russia are sacralized because behind them are generations of Russians who shed blood to make those weapons what they are. They have become a part of the culture to such a degree that commercial considerations take a very distant second place to a main purpose of these weapons—to actually defend the nation. This is absolutely not the case in the United States, with some exception for its Navy, with Americans having no knowledge or recollection of what real war is and what instruments for fighting and winning it are needed. Those things cannot be paid for in money, they are paid for in blood.
Guess what, no nation ever survived the war without state monopolizing it. And that means.... ahem.... monopoly.

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