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As far as the prevailing modern world system is concerned, Africa is the last of the inhabited continent that still promises accumulation at a relatively decent scale. Even though the anticipated accumulation might not be as plenty as in the early phases of industrialization, (the Gilded Age, etc.) it is still expected to be significant, compared to other places on the planet! One should take serious note of the existential problem the system is facing. Since the early 1970s, the rate of profit has been consistently falling all across the world, in particular within the advanced industrial countries (core countries). The collapse of the Bretton Wood Accord (1973-the abandoning of gold-currency convertibility and its replacement with pure fiat money) openly ushered the end of the golden era of the system. This is the main reason why all sorts of financial and other concoctions (various trade agreements, currency manipulations, etc.) came to dominate the capitalist world system!
The expansion of massive un-payable debts to all and sundry is one critical design that has kept the system going. To prop up falling demand as well as stagnant income in the OECD (rich countries), the global regime introduced a credit system, which has been unprecedented in all of human history! From nation states to provinces, from counties to municipalities, all administrative structures of the modern nation states saddled themselves with unsustainable debts. From the largest corporations to owner-operated garages in the villages, debt became the mainstay of businesses all across the world. Business is no more a profit sustained economic activity; rather, it is a global hatchery of debt slaves, mostly in the monetized world. Even individuals or consumers as they are now called (starting from the humble school janitor all the way down to the well paid professionals) have not been spared. The sheeple (human mass) are now wallowing in massive debts, compliment of the fraudulent financial system of the global order (fractional reserve banking, fiat money, etc.). Family/social lives as well as the general health of individuals and society at large (due to polarization/inequality, etc.) are all in dire distress, because of the systemically implemented global debt peonage system! Without the continuous creation of massive debts, the system will not last a single day. Like it or not, the day of reckoning will be upon us, sooner than later!
Behind this poser, there is still a dilemma. There is enormous capital in the world system that cannot find sufficient productive outlets ensuring reasonable rates of return. That there is a glut of capital (phony finance) in the system is one of the best-kept secrets of the reigning order. The narrative that is incessantly preached by global dominant interests about capital not being readily available is almost wholly false. If that were the case, bond yields in the OECD would not have become negative. In other words, what obtains today on the ground is; one has to pay money for the privilege of lending it to states (Germany, et al.)! Moreover, if capital were in short supply, the global pension funds, the real investors in capital markets, (equity or otherwise) wouldn’t have been in such dire strait. These funds assumed (all along) and of course wrongly, they would secure a return of about 7% per annum on their invested capital. Today that is a pipe dream, so to speak. These funds will be lucky if they can have an average return of 1% per annum. The story goes: it is not return on capital one has to be worried about, but rather the return of capital! As it currently stands, pension funds are having difficulties meeting their obligations to their members (i.e., pensioners). As a result, they are engaged in the old game of ‘kicking the can down’!
It is such scenarios (inadequate return, demographic change and saturation of markets at home, etc.) pressuring capital to look at territories in the periphery of the system. The intended mode of accumulation, we hope, might not be as wicked as those days of past (colonialism, slavery, etc.). See Cunningham’s article next column. The African states, gullible as ever and hardly knowledgeable about the ways of the world, continue to open up their territories for all sorts of so-called investments. To help implement this lopsided scheme, the continent has acquired plenty of learned idiots (products of the mill = universities) to do the bidding for their masters from abroad. These useful idiots have become increasingly confident and vocal, as they are encouraged by the power that be (TPTB) to flaunt their superficial knowledge about the world order. Committed activist intellectuals, particularly those in positions of responsibilities, must thoroughly articulate and challenge the prevailing global order that continues to undermine our fate. We shouldn’t fall for the likes of ‘Africa Rising’ memes, which, besides being vulgarly vacuous, (a symptom of internalized insecurity) are also predicated on commodity exports (renewable/non-renewable). Its associated domestic side effects of speculation and rent seeking, for example, in countries like Ethiopia and Kenya, are also facing boomerang effects. Beware, higher order accumulation that significantly leverages politicized ethnicity is neither cohesive nor lasting!
Today, we are printing an article by Fekadu, critiquing the existing global arrangement in regards to Africa. See page 34. He proposes a more promising trajectory for the continent as a whole. His reaction to yet another lopsided initiative (Compact Africa-March 2017, held in Germany) by the core countries of the system to revive/invigorate their conspicuously declining profits, is commendable! Here is another activist intellectual on the current state of the USA, which increasingly resembles situation on our continent. “Speculation in the 17th century in Britain was a crime. Speculators were hanged. And today they run the economy and the country. They have used the capturing of wealth to destroy the intellectual, cultural and artistic life in the country and snuff out our democracy. There is a word for these people: traitors.” Chris Hedges. Good day!