From: Hank Roth <odin@world.std.com>
Subject: Cost of Empire
Followup-To: alt.activism.d
Originator: rich@pencil.cs.missouri.edu
Organization: ?
Date: Sat, 12 Dec 1992 05:06:04 GMT

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{From THE SWORD AND THE DOLLAR: Imperialism, Revolution, and the 
Arms Race, by Michael Parenti, St. Martins Press, 1989}

THE COST OF EMPIRE (pg 74-81)

Let us consider in more detail what it costs to maintain "our" 
military-industrial global empire. If you are an unemployed 
worker whose plant has just moved to South Korea or Brazil or 
Indonesia in pursuit of higher profits, the first thing that 
might come to mind is the number of jobs "our" empire has cost 
us. As early as 1916, Lenin pointed out that at an advanced stage 
capitalism would export not only its goods but its very capital, 
not only its products but its entire production process. Today, 
most giant American firms do just that, exporting their capital, 
their technology, factories, and sales networks. It is well known 
that General Motors has been closing down factories in the USA; 
less well known is that GM has been spending billons of dollars 
abroad on new auto plants in countries where wages are far less 
than what American autoworkers are paid. This means bigger 
profits for GM but more unemployment for Detroit.

Over the last twenty years, American firms have tripled their 
total outlay in other countires, with the fastest growth rate 
being in the Third World. Nor is the trend likely to reverse 
itself. American capitalism is now producing abroad eight times 
more than it exports. Many firms have shifted all their 
manufacturing activities to foreign lands: all the tape 
recorders, radios, bicycles, VCRs, typewriters, television sets, 
and computers. One out of every three workers employed by US 
multinational companies are now in foreign countries. US 
companies continue to export US jobs to other countries at an 
alarming rate: 900,000 between 1980 and 1985, 250,000 of these in 
1985 alone. [This book was published in 89 and the export of jobs 
has accelerated since 85...HR] Thus do the working people of the 
United States pay the hidden costs of empire.

Multinationals do not have to pay US income taxes on profits made 
in other countries until these profits are repatriated to the 
USA---if ever they are. Taxes paid to the host country are 
treated as tax credits rather than mere tax deductions, that is, 
write-offs from the taxes that would normally have to be paid to 
the US Treasury rather than from the income that is taxable. The 
miultinational can juggle the books among its various foreign 
subsidiaries, showing low profits in a high-tax country and high 
profits in a low-tax country so as to avoid paying substantial 
taxes anywhere.

Management's threat to relocate a plant is often sufficient to 
blackmail US workers into taking wage cuts, surrendering 
benefits, working longer hours, and even putting up money of 
their own for new plants and retooling---all of which represent a 
net transfer of income from workers to owners.

Americans are victimized by economic imperialism not only as 
workers but as taxpayers and consumers. The billions of tax 
dollars that corporations escape paying because of their overseas 
shelters must be made up by the rest of us. Additonal billions 
of our tax dollars go into foreign-aid programs to governments 
that maintain the cheap labor markets that lure away American 
jobs---$13.6 billion in 1986, of which two-thirds was military 
aid. Our tax money also serves as hidden subsidies to the big 
companies when used as foreign aid to finance the kind of 
infrastructure  (roads, plants, ports) needed to support 
extractive industries in the Third World.

Nor do the benefits of this empire trickle down to the American 
consumer in any appreciable way. Generally the big companies 
sell the goods made abroad at as high a price as possible on 
American marekts. Corporations move to Asia and Africa to 
increase their profits, not to produce lower-priced goods that 
will save money for American consumers. They pay as little as 
they can in wages abroad but still charge as much as they can 
when they sell the goods at home. 

>From one-half to two-thirds of the major winter and early spring 
vegetales consumed in the United States are imported from poor 
countries, pricipally Mexico, where the land and labor cost a 
fraction of what they do in the USA. Yet these vegetables are not 
sold at cheaper prices than homegrown produce. Likewise, the 
General Electric household appliances made by young women in 
South Korea and Singapore who work for subsistence wages, and the 
Admiral International color television sets assembled by low-paid 
workers in Taiwan do not cost less than when they were made in 
the USA. As the president of Admiral noted, the move to Taiwan 
"won't affect pricing state-side but it should improve the 
company's profit structure, otherwise we woudn't be making the 
move."

We already noted how overseas investments have brought increasing 
misery to the Third World. Of interest here is how some of that 
misery comes home as a visitation upon the American people. We 
have heard much in our media about the "refugees from Communism"; 
we might think a moment about the refugees from capitalism. 
Driven off their lands, large numbers of impoverished Latinos and 
other Third Worlders have been compelled to flee into economic 
exile, coming to the United States, many of them illegally, to 
compete with American workers for entry-level jobs that are 
becoming increasingly scarce. Because of their illegal status and 
vulnerability to deportation, undocumented workers are least 
likely to unionize and least able to fight for improvements in 
work conditions. So they serve as a reserve army of labor, 
further depressing the wage market for American workers.

Not all immigrants are impoverished, unskilled workers. Harsh 
economic conditions in many nations tend to encourage the exodus 
of the younger and more educated without whom development is 
impossible. The result is "brain drain," as the rich nations 
siphon off the trained talent and skills of the poor nations, 
further adding to the differential between rich and poor 
countries and to the downward spiral of the Third World.

Othere injustices inflicted by the empire upon poorer nations 
come home to take a toll upon ordinary AMericans. For years now 
the poisonous pesticides and hazardous pharmaceuticals that were 
banned in this country have been sold by their producers to Third 
World nations where regulations are weaker or nonexistent. (In 
1981, President Reagan repealed an executive order signed a half-
year before by President Carter that would have forced exporters 
of such products to notify the recipient nation that the 
commodity was banned in the USA.) Wit an assured export market, 
these poisons continue to cripple workers in the American 
chemical plants where they are made, and then reappear on our 
dinner table sin the fruit, vegetables, meat, and coffee we 
import. These products also have been poisoning people in Third 
World countries, creating a legacy of sickness and death that is 
starting to backfire on us.

The absence of environmental protections throughout most of the 
Third World affects the health and welfare of Americans in orther 
ways (along with the well-being of other peoples and the earth's 
entire ecology). The chimical toxins and other industrial 
effusions poured into the world's rivers, oceans, and atmosphere 
by fast-profit, unrestricted multinational corporations operating 
in Asia, Africa, and Latin America, and the devastation of Third 
World lands by mining and timber companies and by agribusiness, 
are seriously affecting the quality of the air we all breathe, 
the water we all drink and the food we all eat. Ecology knows no 
national boundaries. The search for cheap farmland to raise 
cattle induces US companies to cut down rain forests throughout 
Central America. The nutrient-poor top soil is soon depleted and 
the land deteriorates from luch jungle into scraggly desert. Then 
the cattle-raisers move on to other forest. The tropical rain 
forests in Central America and the much vaster ones in the Amazon 
basis are being destroyed at an alarming rate and may be totally 
obliterated witin the next two decades. Over 25 percent of our 
prescription drugs are derived from rain forest plants. Rain 
forests are the winter home for millions of migratory North 
American songbirds--of which declining numbers are returning from 
Central America. Many of these birds are essential to pest 
control.

The dumping of industrial effusions and radioactive wastes also 
may be killing our oceans. If the oceans die, so do we, since 
they produce most of the earth's oxygen. Over half the world's 
forests are gone compared to earlier centuries. The forests are 
nature's main means of removing carbon dioxide from the 
atmosphere. Today, the carbon dioxide buildup is transforming the 
chemical composition of the earth's atmosphere, accelerating the 
"greenhouse effect" by melting the earth's polar ice caps and 
causing a variety of other climatic destabilizations. While the 
imperialists are free to roam the world and plunder it at will, 
we are left to suffer the immediate and long-term consequences.

Additonal ways that the empire strikes back home: the narcotics 
that victimize whole segments of our population are shipped in 
through secret international carels linked to past and present 
CIA operatives. Large-scale drug trafficking has been associated 
with CIA-supported covert wars in Cuba, Southeast Asia, and 
Central Aemrica. As of 1988, evidence was mounting linking the 
US-backed Nicaraguan counterrevolutionaries to a network of 
narcotics smuggling that stretched "from cocaine plantations in 
Columbia to dire airstrips in Costa Rica, to pseudo-seafood 
companies in Miami, and, finally, to the drug-ridden streets of 
our society.

The empire victimizes its own people in other grim ways. 
Thousands of Army veterans exposed to nuclear tests after World 
War II are now dying of cancer. Vietnam veterans who came back 
contaminated by the tons of herbicides spracyed on Indochina are 
facing premature death from cancer, while their children have 
suffered an abnormally high rate of birth defects (in common with 
the children of Vietnam). The US military has experimented on 
Americans with its chemical and bacteriological warfare methods. 
The Navy sprayed bacteria in San Francisco in 1950, an experiment 
that has since been implicated in the illness of several 
residents and death of at least one person. In 1955, the CIA 
conducted a biological warfare test in Tampa Bay area, soon after 
which twelve people died in a whooping cough epidemic. In the 
1950s and 1960s, biological warfare tests were done in various 
cities including St. Louis and New York, using bacilli that were 
known to be infectious but supposedly not fatal.

Empire has a great many overhead costs, especially military ones, 
that must be picked up by the people. The Vietnam War cost $168.1 
billion in direct expenditures for US forces and military aid to 
allies in Indochina. The war's indirect costs will come to well 
over $350 billion (for veterans benefits and hospitals, interest 
on the natinal debt, etc.). As the economist Victor Perlo pointed 
out, by the end of the war inflation had escalated from about 1 
percent a year to 10 percent; the national debt had doubled over 
the 1964 level; the federal budget showed record deficits; 
unemployment had doubled; real wages had started on their longest 
decline in modern American history; interest rates rose to 10 
percent and higher; the US export surplus gave way to an import 
surpolus; and US gold and monetary reserves had been drained. 
There were human costs; 2.5 million Americans had their lives 
interrupted to serve in Indochina; of these 58,156 were killed 
and 303,616 wounded (13,167 with a 100 percent disability); 
55,000 have died since returning home because of suicides, 
murders, additictions, alcoholism, and accidents; 500,000 have 
attempted suicide since coming back to the USA. Ethnic minorities 
paid a disproportionate cost; thus while composing about 12 
percent of the US population, Blacks accounted for 22.4 percent 
of all combat deaths in Vietnam in 1965. The New Mexico state 
legislature noted that Mexican Americans constituted only 29 
percent of that state's population but 69 percent of the state's 
inductees and 43 percent of its Vietnam casualties in 1966.

Americans pay dearly for "our" global military apparatus. The 
cost of building one aircraft carrier could feed several million 
of the poorest, hungriest children in America for ten years. 
Greater sums have been budgeted for the development of the Navy's 
submarine rescue vehicle than for occupational safety, public 
libraries, and day care centers combined. The cost of military 
aircraft components and ammunition kept in storage by the 
Pentagon is greater than the combined costs of pollution control, 
conservation, community development, housing, occupational 
safety, and mass transportation. The total expenses of the 
legislative and judiciary branches and all the regulatory 
commissions combined constitute little more than half of 1 
percent of the Pentagon's yearly budget.

Then there is the distortion of American science and technology 
as 70 percent of federal research and development (R&D) funds go 
to the military. Contrary to Pentagon claims, what the military 
produces in R&D has very little spin-off for the civilian market. 
About one-third of all American scientists and engineers are 
involved in military projects, creating a serious brain drain for 
the civilian sector. The United States is losing out in pricisely 
those industries in which miliaty spending is concentrated, to 
foreign competititors who are not burdened by heavily militarized 
economies. For instance, the US machine-tool industry once 
dominated the world market. But since so much of the industry has 
been absorbed by the military, foreign imports have increased 
six-folded and now account for more than a third of domestic 
civilian consumption. The same pattern has been evident in the 
aerospace and electronics industries, two other areas of 
concentrated military investment.

    Benefits of military R&D to the civilian economy have been 
    small and are declining as military technology becomes 
    increasingly specialized and exotic. The rapid expansion of 
    military research diverts rexources from the civilian economy and 
    retards U.S. economic growth and competititiveness in world 
    markets. The few industries that have benefited from military 
    research would be far better off if the money had been spent 
    entirely on commercial research.
 
The pattern of distorion will worsen if the Star Warriors have 
their way. The estimates for the Strategic Defense Initiative 
("star wars") are stratospheric indeed, as much as several 
trillion dollars. The cost to the rest of the economy---as 
measured by the military aabsorption of scientific talent, the 
loss of export markets, and the competitive disadvantage of 
civilian R&D is even harder to calculate.

In his eight years in office President Reagan spent upwards of $2 
trillion on the military. Sums of this magnitude crate an 
enormous tax burden for the American people who, as of 1988, 
carried a national debt of $2.5 trillion, or more than twice the 
debt of the entire Thrid World. Furthermore, Americans must 
endure the neglect of environmental needs, the decay and 
financial involvency of our cities, the deterioration of our 
transportation, education, and health-care systems, and the 
devastating effects of underempoyment upon millions of households 
and hundreds of communities.

In additon, there are the frightful social and psychological 
costs, the discouragement and decline of public morale, the 
anger, cynicism, and suffering of the poor and not-so-poor, the 
militarization and violence of popular culture and the potential 
application of increasingly authoritarian solutions to our social 
problems. 

Poverty can be found in the rich industrial nations as well as 
the Third World. In the richest of them all, the United States, 
those living below the poverty level grew in the 1981-86 period 
from 24 million to almost 35 million, according to the 
government's own figures, which many consider to be 
underestimations---thus making the poor the fastest growing 
social group in the USA. In 1986, the House Select Committee on 
Hunger found that Kwashiorkor and marasmus diseases, caused by 
severe protein and calorie deficiences and usually seen only in 
Third World countries, could be found in the United States, along 
with rising rates of infant mortality in poor areas.

Those regions within the United States that serve as surpolus 
labor reserves or "internal colonies," such as Appalachia, poor 
Black and Latino communities, Eskimo Alaska, and Native American 
Indian lands, manifest sysmptoms of Third World colonization, 
including chronic underemployment, hunger, inadequate income, low 
levels of educaiton, inferior or nonexistent human services, 
absentee ownership, and extratction of profits form the 
indigenous community. In additon, the loss of skilled, higher-
paying manufacturing jobs, traditionally held by White males, has 
taken its toll of working class White communites as well. So when 
we talk of "rich nations" and "poor nations" we must not forget 
that there are millions of poor in the rich nations and thousands 
of rich in the poor ones. As goes the verse by Bertolt Brecht:

  There were conquerors and conquered.
  Among the conquered the common people starved.
  Among the conquerors the common people starved too.

As in Rome of old and in every empire since, the center is bled 
in order to fortify the periphery. The lives and treasure of the 
people are squandered so that patricians might pursue their far-
off plunder.

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Michael Parenti has been a major voice among progressives for 
more than 30 years. He received his Ph.D from Yeale in 1964, and 
has since taught at several colleges and universities, including 
the State University of New York at Stony Brook and at Albany, 
Sarah Lawrence College, the University of Vermont, Brooklyn 
College of the City University of New York, and Howard 
University. The author of DEMOCRACY FOR THE FEW, POWER AND THE 
POWERLESS, and INVENTING REALITY:The Politics of the MAss Media--
-all published by St. Martin's PRess--Parenti regular appears on 
radio and television programs and lectures frequently at college 
campuses around the country. 
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