At long last, the first step toward recognizing that the Industrial Revolution, Colonialism and the system of governance organized as Liberal Democratic Capitalism, have been historically intertwined; forming in some sense a three-legged stool that could not be if one of them was missing.
I have been discussing this
subject for years, and now I see for the first time that someone has made a
step in that direction. You'll see how the idea developed when you read the
article that came under the title: “Is Democracy in Decline Globally?” and the
subtitle: “Corruption and debt darken the global outlook for democracy.” It was
written by Frank Vogl and published on February 21, 2021 in The Globalist.
Vogl makes clear at the start
of his article that he is basing his arguments on what came in the Democracy
Index that's put out annually by the Economist Intelligence Unit, as well as
other documents. What he sees in the Index is that democracy has decline in the
year 2020 almost everywhere in the world, including the United States of
America, which came down a notch from a full democracy to a flawed democracy.
And he sees that 2021 will be an even worse year due to the effect that COVID-19
is having on governance.
The next document that Vogl
mentions is the Corruption Transparency Index, which is issued by Transparency
International, also on annual basis. This year, the index shows that
governments in two-thirds of the 180 countries it has surveyed, are perceived
to be corrupt. Vogl does not come out and say it openly, but the implication of
the examples he gives, indicates that he believes corruption is more prevalent
in the emerging economies than the industrially developed ones.
In fact, Vogl hopes that in
2021, “leading Western industrial countries will overcome the pandemic, and
that this may set off a boom start in their economies. The global impact of
such development would lift the poorest countries out of the rough seas that engulf
them”.
But his hope is tempered by
the troubling reality which he sees in the poor governance that's perpetuated
by corruption, and increasingly enforced by authoritarianism. The result of all
this, is that the poor countries are burdened by high debt they can no longer
service, let alone pay back the principal in full, he says. And this makes it
impossible for those countries to finance a recovery from the effects of the
pandemic.
The shocking part in all of
this, according to a report prepared by the World Bank, is that the emerging
economies that were registering impressive growth not long ago, are the ones now considered the most threatened with bankruptcy. And so, we cannot
help but ask: How did it happen? And the answer to this question is given by
Frank Vogl as follows:
“A decade ago, many developing
countries were encouraged by private investment managers to use the private
markets to borrow –– and they did. Meanwhile, approximately 85% of all foreign
debt held by 120 middle- and low-income countries today is on non-concessional
terms. It is owed to hedge funds, pension funds and other private investors”.
Do you know what this sounds
like, my friend? It sounds like the East India Company of pre-colonial time.
Starting as a purely commercial enterprise, it later developed to become the
symbol of capitalist colonial exploitation of lands that were conquered by the
British military. Today's investors, like those of past centuries, are eyeing
the economic potential of the developing countries, and they are spending time
and energy scheming to fleece them.
Whereas in the past, the
exploiters were helped by state-of-the-art gunboats and cannons produced by the
First Industrial Revolution, today's exploiting investors are helped by sophisticated
propaganda produced by state-of-the-art equipment of the Fourth Industrial
Revolution.
Those investors are going
around scaring the poor countries about doing business with China, telling them
that China's lending practices are predatory when in reality, predatory lending
is what the Western investors are practicing. The non-concessional loans they
offer to the poor countries, encourage the borrowers to set-up a perpetual kind
of Ponzi operation that maintains the borrower in a constant state of indebtedness.
This happens because the poor
countries continually borrow to finance older debts without ever making the
last payment or becoming debt-free. Meanwhile, as debtors, these countries are
obligated to transfer to the lenders at low cost whatever natural resources
and/or manufactured goods they produce.
Thus, we can see that history
is repeating itself, not exactly the same way as before, but along the same
line. That is, you have the Western Capitalist investors acting as the new East
India Company, using the most advanced modern tools, both electronic and
economic, to exploit those who would be better off getting help from China and
other lesser powers. Will this practice ever come to an end?
Luckily, the world now has a
reformed International Monetary Fund (IMF) that is more serious about helping
those who need it than it is about converting the poor countries to adopt a
system of governance that may not suit them, before the help is approved.
The good news is that Frank
Vogl has written about a plan to bail out the heavily indebted poor countries.
It is being prepared by the G-20 nations to be ready by the Summer. According
to the plan, the G-20 countries will contribute to a fund that will be managed
by the IMF, and used to rescue nations on the verge of collapse.
With that, the era of economic colonialism promises to come to an end once and for all.