Revolution: Meet the new boss same as the old boss

There is a lot to be said for change. It gives you a break from whoever is oppressing you at the moment. But change need not necessarily be for the better. More often than not, what seems new is the same old in a different garb. Sometimes, it is worse than what was displaced. And whenever it is hailed by the American press as a true revolution, you can rest assured it’s nothing of the sort.

It is fairly easy to establish whether a given ‘regime change’ qualifies as a revolution, or is just an eyewash that replaces one ruling elite with another. You ask three simple questions: Has more political power passed into the hands of the working classes after the ‘revolution’? Has income inequality reduced, or is likely to reduce, after the revolution? Will economic activity be directed by working class interests (instead of working class interests playing second fiddle to so-called economic imperatives)?

If the answer to all three questions is a clear ‘yes’, ladies and gentlemen, we have a true revolution in our midst. If the answer to even one of them is ‘no’, then, sorry, what we have is not a revolution but merely the fantasy — a bloody fantasy, no doubt, but still a fantasy — of a revolution.

Let’s apply this three-question test to a few revolutionary ‘moments’ in recent history.

India’s independence, 1947: This was one big bogus revolution which installed a native elite in place of the white man, and the plight of the adivasi-farmer-worker either remained the same or, as in post-liberalisation India, began to dramatically worsen. If you think Anna and Lokpal or any other legislation will save us, please spare yourself the fantasy.

The Fall of the Berlin Wall, 1989: The working classes in the former Eastern bloc countries, and Russia especially, are economically worse off now than they were under the Communist regime. Yes, they have freedom of expression. But they lost a golden opportunity to build a society that could combine democracy with economic justice.

The end of apartheid in South Africa, 1990: Neither the Black ghettoes nor the abysmal levels of poverty and crime among the Blacks have reduced in a post-apartheid South Africa with black presidents. Racism is illegal, but the economic disparities between the black majority and the white minority continues as before, and the reason even a man like Nelson Mandela could do nothing much after coming to power is the same reason why the so-called Arab Spring is far from the ‘revolution’ it is touted to be.

The Arab Spring, 2011: The radical uprisings can at best be termed ‘pre-revolutions’ or aspiring revolutions, nothing more. Why? Because in each of these countries - Tunisia, Egypt, Jordan, Yeman, Bahrain —- the working classes have a long way to go before they can wrest political power or even influence from the ruling class.

It might be useful to look at the Middle-East scenario in some detail, for it presents the best case study for what’s likely to happen to other people’s protests around the world.

The petro-dollar effect
You may have noticed that the same American press which went gaga over the Egyptian protests on Tahrir Square was silent on the brutal repression of the people’s uprisings in Saudi Arabia, Oman and Bahrain. Saudi Arabia, with a nod from the US, sent its tanks into Bahrain to quell the protests and prop up the king. So how come what’s hailed as a ‘revolution’ for the Egyptians is not so for the people of Bahrain?

As with any criminal investigation, follow the money. Two things have happened to the world economy since the last Middle-East oil crisis in the mid-1970s: the financialisation, and internationalisation, of capital. These two phenomena, accelerated by technological advances, have changed the nature of global markets. As political economist Adam Hanieh has pointed out, the six Gulf Co-operative Council (GCC) states — Saudi Arabia, Kuwait, United Arab Emirates (UAE), Qatar, Bahrain and Oman — have been central to this process.

With the GCC states accounting for more than half the world’s oil exports, they began accumulating huge surpluses, which kept rising as oil prices rose ten-fold, from $9.76 per barrel in 1999 to $90.32 per barrel in November 2007. Most of these cash reserves were held in dollars — the Americans made sure they did, through a mix of coercion and bribery. This ensured that the Arab ruling class had a stake in keeping the dollar as the international reserve currency — crucial for bankrolling the debt-ridden American economy.

But the GCC’s petro-dollars can’t be sitting idle. They have to go somewhere as investment, and they did — to American and European banks. This money found its way to the equity and money markets in the West, fuelling the American housing bubble and the sub-prime crisis; it also accounted for the bulk of the FDI flowing into all the middle-east countries, serving to prop up the long-standing dictatorships that came under pressure this year — in Tunisia, Egypt, Yemen, Jordan.

By end-2007, private investments by GCC-based companies or families totaled $2.2 trillion — more than the combined GDP of Australia and India for 2008, and more than the assets held by the Chinese central bank.

Fictitious profits
It would not have been so bad if all this money had been invested in industry or employment-generating productive activity. But it was not — the rate of profit for most productive activity, from agriculture to making soap, had anyway fallen way below the interest rates fixed by bankers and lenders.

So, much of the capital went into speculative investment on assets. [This means you get a return on capital not by creating value (through productive use of labour), but by relying on a continuous flow of liquidity into the asset market, causing an appreciation in its value. For example, I will buy a house/share and wait for more money to come into the real estate/stock market, and when it does, the price of my house/share will go up, and I will sell it and pocket a profit  — all without having produced an iota of value. The financial sector of capitalism is basically a giant Ponzi scheme.]

But speculative profit is fictitious profit. At some point, it needs to have some ‘real value’ backing it. If it doesn’t, it will create a bubble, which will burst one day. And when that happens, the owners of such investments (usually banks) go bankrupt, as they did when the US housing bubble burst in 2008. But a society controlled by rich investors will not let rich investors go bankrupt.

The working class will be made to pay for the foolish losses of the rich through a ‘bail-out’ —  basically a transfer of tax payer’s money (public wealth) into banks (private hands). This ‘bail-out’ money — also referred to as a ‘stimulus package’ by the financial press — will set in motion another stream of capital flows, leading to another bubble-burst cycle (unless that money goes into productive activity, in which case it might kick-start consumption and demand).

But much of the bail-out money post the 2008 crisis has again gone into speculative trading and investments, which means that things are not going to improve. If capital accumulation has to happen (the business press’ term for this is ‘economic growth’), it will have to be by dispossessing the state of its assets, exploiting as yet untapped natural resources, and further driving down the wages of the working classes around the world.

What’s at stake
So, for the US, what is at stake in the Middle-East is control over the world’s largest energy reserves. This also has the effect of ensuring that the dollar remains the global reserve currency and speculators keep making money while the working classes and poor around the world get into austerity/starvation mode.

Given the strategic importance of the Middle-East for the global investor class (whose interests the US military presence serves to protect), it shouldn’t be surprising that the Gulf has basically been a staging post for the invasion and illegal occupation of Iraq, Afghanistan, and Libya.

As of now, the interests of the ruling classes of the Gulf and Middle-East states are completely aligned with those of global capital, and opposed to those of the working classes in these countries. So in the present scenario, no matter who comes to power after whatever elections are held, as we saw in the case of post-apartheid South Africa, and will see in Egypt, political change will not automatically usher in a change in economic orientation away from the global neoliberal agenda (privatisation, liberalisation, free flow of capital, restrictions on worker rights), which has been at the heart of increasing economic distress all over the world. And without that change, any political change will amount to nothing for the vast majority bravely standing up to the military might in these repressive regimes.

To sum up: there can be no ‘revolution’ worth the name in any of the poorer Middle-East nations unless the oil-rich Gulf monarchies are overthrown; but that’s not going to happen unless the US gets out of the Middle-East; and that’s not going to happen unless the oil runs out; and that’s not going to happen any time soon.