Hu's on First - belated reply I

Nicholas Siemensma nsiemensma at
Thu Nov 20 23:10:30 MST 2003

[Sorry, I've had server problems for two weeks and am
still catching up on messages.  Before I reply to Gary
MacLennan's interesting post, just a quick comment on
all the messages about the Grimes interview.  Dunno
why it caused such a fuss.  DMS has made the important
point that technological advances in exploration and
recovery techniques such as drillhead sensors with NMR
scanning and satellite imaging, pressurised
reservoirs, 3D seismic etc can increase the
energy-efficiency of oil extraction.  Thus
recoverability is raised in both economic and
technical terms, and so is the proved position of
ultimately recoverable reserves, conventional relative
to unconventional etc.  Therefore it's the cyclical
processes of accumulation which produce the constant
variation between famine and glut, not some ultimate
resource constraint.  I've always talked about oil as
a commodity both like and unlike any other, and as
part of the valorisation process.  But I'm sure that
Marxists must still talk about depletion and scarcity.
 Oil is a scarce commodity because it is finite,
essential, has no perfect substitutes, and is *the key
determinant of the rate of relative surplus value* –
the prevailing social productivity of labour. 
Available energy and energy-efficiency is the key
factor in increasing social complexity and raising
relative surplus value, ie. the technological,
material and scientific change which, as DMS points
out, applies to energy appropriation itself.  This
circular relationship produces entropic traps which
map onto accumulation crises and the overproduction of
unvalorisable capital.  So you have investments in
procuring energy, which is of course the basic input
in these same activities, and if the rate of
productivity isn't raised fast enough to
counterbalance the other macroeconomic effects then
you are screwed, because the logic of "self-expanding
value" requires increasing rates of energy
transfusion, as does expanding the efficiency and
productivity of the energy-base itself.  The rising
embodied socially-necessary labour time of your energy
resource demands large amounts of very
easily-accessible fossilised energy, combined with
effective innovations; or you must have direct energy
substitution and significantly reduced
energy-intensity.  Without this beneficial combination
(which we don't have) you get adverse growth trends
and valorisation crises emerging from technological
failure (which we do have, IMO).  We also have to
think about the peculiarity of oil price-formation,
and a whole lot of other things.] 

Gary MacLennan wrote: 
> What intrigued me about the Bush-Hu thing was that
> it highlights the 
> dilemma confronting Australia.  It is still a white
> colonial outpost in 
> Asia, but it is one which desperately needs to trade
> within the 
> region.  Unlike poor Mexico, Australia is far from
> God and the United 
> States.  That makes them cautious in their "All the
> way with the USA" 
> rhetoric.  A substantial section of the Australian
> bourgeoisie worry about 
> Howard's closeness to the US hurting our trade
> relations in Asia, which is 
> increasingly being dominated by China.

I'm sure this is right: October's events in Canberra
were not a pageant of Napoleonic bourgeois solidarity,
but signs of an historical impasse.  The issue of
hegemonic tutelage and strategic orientation figures
in all the semi-public theoretical models and policy
discussions of Australian imperialism right now.  Last
month former PM Paul Keating addressed the CPA
Congress in Melbourne on "Australia's Economic and
Geopolitical Positioning".  It is precisely because
Keating is the avatar of Australia-in-Asia, the
integration of Australian state and capital within the
Asian co-prosperity sphere and the geostrategic
architecture of an ASEAN-type framework, that his
views so clearly reveal the various underlying
tensions and projects at the heart of the Australian
state at a time of tectonic movements between Japan,
China and the USA.  They do more than indicate a
mindset: the joint visits of Bush and Hu saw a rash of
ruling-class strategic daydreaming around ending
Australia's historical subjection to US imperialism. 
Of course, Australia cannot choose or decide to do
anything, tied as it is by millions of economic,
political and military threads to US strategy, unless
there is first of all a substantive regional weakening
of US hegemonic power, which could only come about
through failure to compete with China.  Keating told
the audience:

"While the 20th century was the century of the
Americas, the chances are the 21st century will be the
century of Asia and we may see, for the first time, a
real eclipse of American economic power.  China's
economy will have eclipsed Japan's in the next
half-dozen years.  It is going to demand a huge volume
of resources – and our Australian resource industries
will be a clear beneficiary.  The decline in
commodities we have seen in the world since the middle
1960s, which cut our national income dramatically by
the 1980s, may see itself reversed as China changes
the commodity equation around the world.  China will
also emerge as the second strategic pole in the world.
 The only country with the cultural confidence and the
military unity to deal confidently with the US is
China.  Europe will never have the political unity
that China is likely to have, has had - nor does
Europe have the cultural confidence. The Chinese know
who they are and what they are. And they do not need
the approval of the US to know what they should do or
can do.  The most important thing for us to know about
China is that it will be an economy built around the
individual and small and medium enterprises. It will
not be like Korea or Japan.  Domestic demand will be
the principal driver in China. It will not primarily
be an export economy, though it is a big exporting
country. What the Chinese are going to do is give
people a house, a refrigerator, a television set and
CD player, plenty of telephones and lots of toys for
the kids. That's the kind of economy they are going to
have - a real one, one much more like Australia's than
Japan's or Korea's.  China is a phenomenon and it is
our backyard. There is a chance China will change the
whole commodity equation in Australia."

Criticising Australia's position as "vicar of empire,
or deputy of the United States", Keating questioned
the benefits of a free trade agreement with the US,
and suggested an ideal strategy would be "having a
number of relationships at once.  It's a bit
promiscuous, I know."

Meanwhile the ALP's foreign policy spokesman, Kevin
Rudd, called for the revival and reform of the APEC
project, as Australia had been left out of regional
structures like ASEAN Plus Three (China, Japan, ROK
along with the 10 ASEAN nations) and ASEM, etc.  Rudd
had "grave concern for our future trade and our future
exports to these areas and therefore our future
standard of living in this country", and suggested
that the Oz government needed to take up the APEC
drive along with Japan, as had occurred under former
Labor PM Bob Hawke and, of course, his successor
Keating.  (One of the favourite images of "engagement"
ideo-mythology in the Nineties was Hawke's speech in
Seoul in Jan 1989, proposing "a more formal vehicle
for regional co-operation," ie APEC, an organisation
initiated mostly by diplomats from Australia and
Japan's Ministry of International Trade and Industry
[MITI].)  At the same time, the Sinophile Rudd
reiterated the priority of the US "special
relationship", the base-rock of Australian
imperialism, anchoring Australian national sovereignty
firmly (and perhaps finally) in the US geopolitical

The current ALP position, behind all the stuttering
and retractions, is that Keating misread the runes –
they've accepted and legitimised the so-called Howard
Doctrine, but with their own "regionalist" inflection.
 In any case, it's a bit hard to differentiate
Keating's promiscuity from Howard's realism: nobody,
it would seem, is willing to trash the ANZUS ark of
the Covenant.  

Most analysts, placemen and mouthpieces to capital
will admit that – whatever the contingent, fortuitous
or surface-form of mutual needs, tactical alliances
etc between China and the USA – China is not a status
quo imperialist power, ie. it is a competitor, and
subordinate national capitals like Australia must
eventually decide whether or not to re-orient.  For
the moment though the clamant talk on all sides is of
"complementarity" and useful asymmetry, the idea that
in fact China's interests are homologated to those of
the US; they need each other's markets, capital,
energy supplies which the US can guarantee etc.  All
true.  This is buttressed by talk about factor
endowment and the "material bases of partnership": US
capital invested in cheap-labour Chinese manufactures
delivered to Oz, in return for our stable and reliable
supplies of energy, minerals and raw materials, with
North America acting as consumer of last resort, ergo
the three are objectively allies and partners in
security and capital accumulation.

This train of thought originated in a famous 1989
report by Ross Garnaut, "Australia and the Northeast
Asian Ascendancy."  In the Heckscher-Ohlin world of
comparative advantage, Australia's role was to develop
a complementary trade with Japan and the NIEs based on
resource-intensive exports of minerals, energy and
agriculture.  China thus functions today among
Australia's leading markets for mining, energy and
agribusiness commodities such as wool, wheat, iron
ore, directly-reduced iron, copper and copper ore,
aluminium, coal and, of course, liquefied natural gas.
 Australia's weak manufacturing sector – itself a
result of neoliberal attacks on archaic Fordist
demographics, under the phoney banner of corporatism
and the ALP-ACTU Accord – is supplemented by imported
ETMs.  The Samuelsonian aspiration of the Garnaut
Report – that the dominant components of Oz exports
would *eventually* shift to ETMs and services – has
been abandoned by all but a few manufacturing unions
and post-Keynesian cranks.  The specifics of national
capital formation mean that the largest domestic
corporations are mostly resources/metals giants such
as BHP Billiton, Rio Tinto and Woodside, which rarely
invest in Asian countries; Europe and North America
still receive two-thirds of Australian flows, but this
is slowly changing as the share of FDI and portfolio
equity investment in overall foreign investment
declines.  Meanwhile most inward investment in
Australia, also centred on the Anglo-American axis, is
speculative – except for a few large Chinese and
Japanese equity deals linked to energy supply
contracts – especially with the current interest rate
differential, forming part of an asset bubble
growth-trend fuelled by the deflation racking east
Asia, as a tidal wave of hoarded dollars flows back to
the US heart of the vortex, a pole bleaching white the
world system.  The overseas credit heading down under,
and the net foreign debt incurred (now around 47% of
GDP), raises vulnerability to the vicissitudes of the
US-dominated global capital-circus, credit rating
agencies and the IMF, aka "global markets".  It is a
huge anchor wedding Australia to the United States. 
If Australian capital has a card to play in East Asian
markets, it must be spades: minerals and energy

An outline of this can be found in a joint report by
APEC and the Australian Bureau of Agricultural and
Resource Economics, "Trade and Investment
Liberalisation in APEC: Economic and Energy Sector
Impacts".  As Oz abandons brainless metal-bashing and
plastic-extrusion, and retires fixed plant and
machinery for the dazzling spectacle and fake promise
of "dematerialisation", energy will be freed up for
export to meet rising Asian demand.  "We have a golden
opportunity for this country to resource the
industrialisation of China", said Trade Minister Mark
Vaile the other week.  This was also the gist of a
report recently released by the Economic Analytical
Unit of the Department of Foreign Affairs and Trade,
"China's Industrial Rise: East Asia's Challenge".  The
talk is that Australia can act as a stable partner, a
reliable supplier to NE Asia because it is a
Christian, Western democracy whose security is
guaranteed by the US alliance and American maritime
supremacy in the Asia-Pacific region, control of the
sealanes etc.  According to Howard himself, Australia
is "able to do something that probably no other
country could do" based on its "unique strength" and
"special characteristics
we are a European, Western
civilisation with strong links to Asia, but here we
are in Asia."  Australia's special identity as a US
Trojan horse in the regional architecture nevertheless
provides real benefits to China and the other NIEs. 
This version of complementarity underlies the
Australian attempt to straddle and exploit the dyadic
competition between the hegemon and its challenger. 
The 1997 DFAT White Paper, in its outline of the new
Howard Coalition government's regional agenda,
notoriously announced that Australia had "no need to
choose between its history and geography
need not require reinventing Australia's identity or
abandoning the values and traditions which define
Australian society
Turning our face to the East does
not mean turning our back on the West".  The strategy
would be "Asia first, but not Asia only".  For a while
this was just public mood music with no significant
policy change.  This tentative junking of
Keating-style multilateralism accelerated with
fantastic rapidity after 1998, its tempo driven by
calamitous breakdown, social implosion and political
aftershock throughout SE Asia.  Amid the disarray and
confusion evident in the councils of Australian
imperialism, the "Howard Doctrine" emerged.  

The discourses and theoretical maps of this policy
emerged in Fred Benchley's notorious 1999 interview of
Howard in the Bulletin, which described Australia as a
"deputy sheriff" engaged in forward defence of the US
Empire.  According to the PM, East Timor was a
"turning point in external relations", with Australia,
in White Man's Burden guise, responsibly acting "above
and beyond its immediate interests", bringing into
play its "unique characteristics as a Western country
in Asia
with strong links to North America".  The
Howard Doctrine, epitomised in successive and
increasingly grandiose and triumphalistic ministerial
statements about the INTERFET operations in East
Timor, drew lots of predictable applause from the
milk-fed priesthood, along with bitter attacks about
its celebration of "practical and realistic" ad hoc
approaches to bilateral relations.  The
long-discredited politics of leaning on the hegemon as
guarantor of regional security was feverishly dusted
off amid the high flowering of hurrah-imperialism and
"power projection".  The multilateralism of
Hawke-Keating engagement was rejected as romantic
iconostasis, merely an obstacle to sidestep and move
resolutely on: thereby condemning the path undertaken
since the Defence Review of 1972 and the Dibb Report
of 1986.  The seemingly unbounded, uncritical faith of
the "alliance" was lionised and warmly embraced by
simple racists and ghastly reactionaries disturbed by
the rhetoric of the old Labor government – many
preferred abandoning the fig leaves of engagement and
mellow cultural pretension for the adoption of brute
force and simple coercion, now trumpeted as a great
new phase of Australian collective maturity,
self-assertion and race-patriotism.  After Australian
troops participated in the invasion of Iraq this year,
a new White Paper positioned the US relationship as
Australia's pre-eminent strategic issue.  The 1997
document had ranked the Americans alongside China,
Japan and Indonesia; in 2003 it read: 

"The depth of security, economic and political ties
that we have with the United States makes this a vital
relationship.  No other country can match the United
States' global reach in international affairs
strengthening Australia's ability to influence and
work with the United States is essential for advancing
our national interests
 The US strategic presence is
the most significant and positive force for stability
in Asia.  Australia's ANZUS alliance with the United
States is fundamental to our national security.  And
as a pillar of US engagement in Asia, the alliance
strengthens the stability of our region." 

The strategic purpose of craven submission to US
maritime strategy, martial buffoonery and the ongoing
hypostasis and formalisation of the American Empire is
to "complement and reinforce Australia's policy of
close engagement with East Asia and to ensure a
continued constructive United States engagement with
the region", an "important element in the post-Cold
War strategic architecture in the Asia-Pacific region,
helping to sustain US strategic engagement in the
Western Pacific."  In turn, of course, Australia's
sustained worth to the USA lies in its proximity to
the key straits and littoral outliers of SE Asia. 

There is no getting away from the really strident
claims and exterminist policies of the Howard epoch,
compared to the Labor position that the APEC regional
forum must be the primary basis for regional
diplomacy, economic and defence co-operation,
multilateral trade liberalisation, counter-terrorism
etc.  But the emergence of the Howard Doctrine is not
a freak event or an aberration: on the contrary it is
the logical outcome of longstanding historical
processes.   Once you strip away what appear to be or
are alleged to be the opposing ideological programmes
of Howard and Keating – which bear a vast explanatory,
confabulatory load in many analyses – there is a lot
of distinction being made right now without much real
difference between "emotional and practical
regionalism", or without understanding the precise
nature of any distinction.  The public declarations of
leaders and surface run of events are not much help at
all when it comes to drawing conclusions and
understanding the genesis or the developmental dynamic
and immanent logic at work here; actually, without any
kind of analysis of what's going on underneath, it is
simply barren, inevitably locking in a bivalent
typology of forelock-tugging v. independent foreign
policy.  As we are still living through the
earthquake, it is hard to see the whole tumultuous
period very clearly; however, it is evident that the
Labor advocacy of APEC regionalism (and the legacy of
the 1994 Bogor summit) is itself a position which was
long ago made nonsense and has lost all claim to
ideo-historical legitimacy or even rationality. - Yahoo! Personals
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