Part II of "World Depression: Regional Wars and the Decline of the US Empire"
by Prof. James Petras
Global Research, April 5, 2009
"For Part I of this article, see World Depression: Regional Wars and the Decline of the US Empire, by Prof. James Petras - 2009-03-30
by Prof. James Petras
Global Research, April 5, 2009
"For Part I of this article, see World Depression: Regional Wars and the Decline of the US Empire, by Prof. James Petras - 2009-03-30
The worldwide depression has both common and different causes, affected by the interconnections between economies and specific socio-economic structures. At the most general-global level the rising rate of profits and the over-accumulation of capital leading to the financial-real estate-speculative frenzy and crash affected most countries either directly or indirectly. At the same time, while all regional economies suffered the consequences of the onset of the depression, regions were situated in the world economy differently and subsequently the effects varied substantially......
The Middle East: Depression and Regional Wars
The key to the crisis and breakdown of the Middle East is rooted in the imperial-Zionist regional wars and the collapse of commodity prices.
The oil producing countries accumulated vast ‘rents’, which they re-cycled into large-scale finance, real estate and military purchases in and out of the region. Profits concentrated in the hands of billionaire absolutist rulers led to highly polarized class relationships: super-wealthy rentiers and low-paid immigrant laborers limited the size and scope of the domestic markets. To break out of the crisis of over-accumulation and falling profits, the ruling elites adopted two strategies that temporarily avoided the crisis: Dependence on large-scale export of capital to rent, interest and dividend-yielding sites throughout the world – first to the US and Europe and later to Asia and Africa. The second strategy was to recycle profits into pharaonic real estate, tourist and banking centers in the Gulf States…leading to an enormous real estate bubble.
The collapse of the Middle East ‘rentier (or non-productive) oligarchies’ was detonated by the frenzied commodity oil boom, between 2004-2008, which heightened the process of over-accumulation – and the over-extension of debt and labor importation. The result was the onset of a regional economic crisis, in which budget and trade surpluses are replaced by mounting deficits. At no point did the Middle East economies diversify from their foundation based on ‘rents’ and create a diversified economy centered on production and the creation of a dynamic mass-based regional market. The rentier ruling classes face a growing mass of unemployed immigrant and domestic workers, the massive flight of thousands of expatriate European financiers, real estate professionals and other non-productive hangers-on.
No longer the beneficiaries of the petro-dollar boom – as prices, profits and rents collapsed - and no longer the powerful bankers and holders of debt, the Gulf Arab ruling class has few external and internal resources and outlets to project a ‘recovery program.’
Worse still, in the midst of this emerging economic collapse, the militarist state of Israel serves as a regional destabilizing force projecting its power and colonial ambitions throughout the region. Through one of world history’s most unique configuration of power, the economically insignificant state of Israel, operating through the activity of several tens of thousands of strategically-placed, highly organized, disciplined and ideologically committed loyalists in the Diaspora, control key levels of political power in the US government."
The Middle East: Depression and Regional Wars
The key to the crisis and breakdown of the Middle East is rooted in the imperial-Zionist regional wars and the collapse of commodity prices.
The oil producing countries accumulated vast ‘rents’, which they re-cycled into large-scale finance, real estate and military purchases in and out of the region. Profits concentrated in the hands of billionaire absolutist rulers led to highly polarized class relationships: super-wealthy rentiers and low-paid immigrant laborers limited the size and scope of the domestic markets. To break out of the crisis of over-accumulation and falling profits, the ruling elites adopted two strategies that temporarily avoided the crisis: Dependence on large-scale export of capital to rent, interest and dividend-yielding sites throughout the world – first to the US and Europe and later to Asia and Africa. The second strategy was to recycle profits into pharaonic real estate, tourist and banking centers in the Gulf States…leading to an enormous real estate bubble.
The collapse of the Middle East ‘rentier (or non-productive) oligarchies’ was detonated by the frenzied commodity oil boom, between 2004-2008, which heightened the process of over-accumulation – and the over-extension of debt and labor importation. The result was the onset of a regional economic crisis, in which budget and trade surpluses are replaced by mounting deficits. At no point did the Middle East economies diversify from their foundation based on ‘rents’ and create a diversified economy centered on production and the creation of a dynamic mass-based regional market. The rentier ruling classes face a growing mass of unemployed immigrant and domestic workers, the massive flight of thousands of expatriate European financiers, real estate professionals and other non-productive hangers-on.
No longer the beneficiaries of the petro-dollar boom – as prices, profits and rents collapsed - and no longer the powerful bankers and holders of debt, the Gulf Arab ruling class has few external and internal resources and outlets to project a ‘recovery program.’
Worse still, in the midst of this emerging economic collapse, the militarist state of Israel serves as a regional destabilizing force projecting its power and colonial ambitions throughout the region. Through one of world history’s most unique configuration of power, the economically insignificant state of Israel, operating through the activity of several tens of thousands of strategically-placed, highly organized, disciplined and ideologically committed loyalists in the Diaspora, control key levels of political power in the US government."
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