Capitalist modernity




Beirut, October 30, 2003


As it happens this academic year I’m on a Fulbright in my native country—Syria. Even though I was “accidentally” born in Lebanon (where I routinely benefit from its Internet services as I’m doing right now), I grew up in Aleppo (north of Syria) and moved to Lebanon at the age of nine in the wake of the Baathist nationalizations in 1965 of the major industrial outlets (which, incidentally, makes me a well-fed bourgeois). I therefore had my oedipal period in Aleppo, and unable to sublimate it in Beirut, I moved to France and the U.S. where I finally settled and received the citizenship. Coming back to Aleppo as an old man (with my Oedipus complex still unresolved) from my American exile, and with 150,000 U.S. troops as Syria’s new neighbors (not to mention the Syria Accountability Act just approved by the lower house of Congress), has made me think not so much about the end of history, the last man, and the clash of civilizations, but about the economy. To begin with, Syria’s economy is what might be safely labeled a “barter” economy designed for minimal subsistence and for annoying its neighbors, and runs with an annual state budget of roughly $5 billion. In the meantime, regarding Syria’s ex-Baathist neighbor, which has the second oil reserves in the world, the Bush administration has decided to pump into the Iraqi economy $87.5 billion worth of grants—out of which $65 billion are for maintaining troops in Afghanistan and Iraq (even though Congress had initially requested that $10 billion be donated as “loans”)—while simultaneously cutting taxes at home (but only the rich will benefit, critics tell us), and at a time when there are fuzzy indications that the economy might be improving. The news today that the economy, by expanding at an unexpected rate of 7.2 percent for the last quarter, the highest G.D.P. growth since the first quarter of 1984, may be shifting towards a new cycle of growth, is still too premature to confirm. The point here is whether the Iraqi war, which still has made no sense politically, does have an economic rationale, or whether it could be justified economically. That seems an even harder task, considering that, politically speaking, Republicans were at their height prior to the war, and Bush’s approval rates were extremely high in the wake of 9/11; but, at the same time, the economy was in a slump (a deep one, according to some economists), with unemployment going up and the stock market down, while the low interest rates have encouraged massive state borrowing. There are well known but confusing arguments regarding how the Bush administration will be able to solve all its economic  contradictions, such as initiating large tax-cuts while going for a costly war with uncertain results; or piling up a huge state deficit, when the large trade deficit is becoming more of a problem (hence the policy to weaken the dollar).


I’m not sure how all those variables, put together, can make sense, and whether the administration will be able to pull its economic plan meaningfully. But then, and to make things worse, there’s another parallel Iraqi economic plan, even more uncertain than the domestic one. Are the two related, and do they make sense together? Considering that the administration has lost its war politically, and that not a single site of Weapons of Mass Destruction (WMD) has been discovered, and no pacification plan has worked out yet, does economic management have any better chance of survival? Or, can it survive on its own with all that catastrophic political debacle? It is commonly assumed that the Bush administration’s proposed reconstruction plans for Iraq are meant to stabilize the country politically through providing a modern economic infrastructure. That proves, however, a much bigger gamble than the political per se. That the political—whether in its narrow sense of fight against terrorism, or in its more general democratic orientation—became the sole focus of this military campaign is understandable. But, in the final analysis, we’re back to “it’s the economy, stupid!” motto: What else is the U.S. doing in Iraq besides its attempt to implement a free-market capitalist economy? And considering that Iraq, like the region at large, has “missed” its capitalism over the last millennium, will those billions of dollars of taxpayers’ money make any sense in a primitive economic  environment? Maybe it’s safe to assume that the fanatical resistance (some of it by non-Iraqi elements) that we’re witnessing in Iraq on a daily basis is not simply about occupation per se, nor is it about the values of “Islam” versus the west, but it’s a resistance against capitalist modernity tout court.


The Fertile Crescent had been ruled by various Islamic dynasties and empires for over a millennium. It could be argued that the Islamic conquests of the seventh and eighth centuries, having profited from the decline of the Roman system a couple of centuries earlier, connected the fertile eastern Mediterranean with the more remote desert regions in Arabia and central Africa, creating an economy that brought similar patterns of agrarian production and land tenure, textile manufacturing, and in the minting of currencies and their circulation. Even though right at the beginning of the previous millennium the Abbasid caliphate in Baghdad had already lost a great deal of its luster, and patterns of military feudalisms were becoming the norm, the cities of the western Mediterranean were in no better shape than those of its eastern shores. It was in effect only the feudal revolution in c. 950-1200 that irreversibly pushed Europe to the forefront, making it the leader of world civilization. There’s no need to go over the arguments regarding the “first European revolution,” as a historian labeled it, and why and how it occurred at that particular juncture. I’m more concerned with the crucial fact that the eastern Mediterranean did not follow up, leaving it at the mercy of various military feudalisms. Thus, even though the Ottomans were a terrifying military force by the time they controlled Constantinople in 1453, their economic infrastructures proved worthless in comparison to the Italian city-states. In the words of Fernand Braudel:


"The economic and cultural differences between the two zones [of the Mediterranean, the east and the west] became increasingly marked in the sixteenth century, while their respective positions were being reversed. Since the thirteenth century the East had gradually lost one by one her supremacy in various fields: the refinements of material civilization, technical advance, large industry, banking, and the supply of gold and silver. The sixteenth century saw her final defeat, in the course of an unprecedented economic upheaval when the opening up of the Atlantic destroyed the age-old privilege of the Levant, which for a time had been the sole repository of the riches of the 'Indies.'"


And Braudel then adds in what now looks in hindsight like a prophetic call:


"From that point on, every day saw a widening of the gap between the standard living of the West, which was going through a revolution in technical and industrial progress, and the eastern world of low-cost living, where money coming from the West would automatically rise in value and acquire higher purchasing power." (The Mediterranean, 1:137)


That every day saw a widening of the gap between the standards of living of the east and west is something hard to swallow, in particular if you’re settled on the eastern Mediterranean. My monthly Fulbright allowance is equivalent to all the professors’ salaries combined at the History Department at Aleppo University; and, at this rate, the lucky Fulbright candidate in 2050 (if not earlier) will visit Aleppo with an allowance equal to that of the entire Faculty of Arts and Human Sciences. It caught my attention this past month that Rumsfeld was complaining that the U.N. and U.S. personnel salaries of the civil and military staff serving in Iraq are ten to twenty times that of their Iraqi counterparts; and, pending on professional qualifications, it could even be forty or fifty times higher. Rumsfeld, however, who has shown no talent nor patience for nation-building, reads in those numbers a sign of greed and corruption, as if it’s a matter of decent bookkeeping, while in reality it’s an effect of that deep socio-economic gap created by an aggressively expanding capitalism between different civilizations—and that’s precisely what the U.S. occupation is all about. If the per capita income of Syria and Iraq is $1,500 a year, the U.S. and the rest of the world won’t suffer much, even though that would considerably reduce the purchasing power of such countries. Such countries, however, due to their socio-economic backwardness, are already much in isolation, even by regional standards, and they’ll be more isolated a decade or two from now. Islamic extremism feeds on such isolationisms, and attempts to create popular brands of Muslim nationalisms with a broadband “Islam” that brings them under one utopian vision. Rebellion against capitalist modernity takes various forms, from religious fanaticism to narrow-minded nationalisms, and in its latest metamorphosis it takes the form of the fight against coalition forces in Iraq. But if the Polish and Spaniards are targeted side-by-side to the Americans and Brits, it’s because they’re all part of that international community integrated into world capitalism. Hence they’re all equal targets in the eyes of those who despise capitalist modernity.


The U.S. therefore did not occupy Iraq so that it would have more time to search for WMD. Nor was it for establishing a provisional ruling council that would pave the way for a democratic society. Even though democracy—defined as civil society having its share in political decisions—is a legitimate goal, it’s difficult to imagine a democratic society unless the per capita income goes up to at least $6,500 a year, which represents Turkey’s present level. Obviously, laying down the foundations of a modern capitalist Iraq is no easy task, and if you’re a longue durée fanatic like myself, you might think that it’s an altogether suicidal task. But it’s at least worth having the arguments laid out, and see what’s at stake here. It is therefore naïve to assume that the so-called “Iraqi resistance” was created thanks to a series of political and administrative mistakes by the occupying forces, as if that “resistance” was simply targeting an occupation rather than a complete revamping of the socio-economic infrastructures. Marx should be whispering in his grave: “It’s the economy, stupid!”





copyright © 2003 zouhair ghazzal