Guest writer M. Shahid Alam of Northeastern University, Boston, Massachusetts, continues to explain why he thinks the current global economic situation will lead to international finance centers moving to Beijing and New Delhi.

I was on sabbatical when Al-Qaida brought down the Twin Towers on September 11. Then, I was relieved to be away from my students, afraid that some of them might want to lump me with those who had perpetrated these attacks.

I am on sabbatical, again, as the towers on Wall Street were being toppled by greed, recklessness and fraud; by a free-market ideology that has no regard for human life; by capitalist elites and their partners in the White House and Congress, who had turned the financial sector into a giant Ponzi scheme.

Americans have been subjected to acts of ‘terrorism’ whose final human toll will make September 11 look like a tea party. The perpetrators of this terror are all homegrown; they were trained not in the mountains of Afghanistan but at Harvard, Yale and Stanford; the bankers, executives and legislators who preyed on Americans are the crème de la crème of American society.

Wall Street SignImage by: Matze Ott

When I return to teach in Fall of this year, I expect to meet students chastened by their experience. Nothing undermines capitalist ideologies faster and more effectively than capitalist crises. No critique of capitalism can be more penetrating than the depredations of unemployment, immiseration, homelessness that it inflicts on its victims. So recently victimized – at the very center of global capitalism – perhaps, Americans might learn to empathize with victims elsewhere – in Africa, Asia and Latin America – who have been ravaged by this system for centuries.

Capitalist ideologues will be working overtime to deflect American anger away from the system to a few villains, to a few rotten apples. Congressional hearings will identify scapegoats; they will hang a few ‘witches.’ A few capitalist barons will be sacrificed. As public anger subsides, attempts will be made to shift the blame to feckless home buyers and compulsive consumers. At all costs, the system must be saved. The capitalist show must go on, with as little change as possible.

Quite apart from this crisis, however, new technologies, in combination with the irreversible shift of sovereignty to some segments of the capitalist periphery, have been changing the dynamics of unequal development. The high-wage workers – the so-called middle classes in the developed countries – have been losing the protection they have long enjoyed against competition from low-wage workers in China and India.

More and more global capitalism will enrich some workers in the ‘periphery’ at the cost of workers in the ‘centers’ of capitalism. In the years ahead, the great alliance that was forged be-tween capitalists and workers in the centers of capitalism will come under greater strain. More and more, the interests of these two classes will diverge.

Powerful corporations will still insist on openness, while growing ranks of workers will press for protectionism. This revival of class conflict in the old capitalist centers will strain existing political arrangements. After a co-optation that has lasted for more than a century, the demos will begin to threaten the corporate elites. New demands will be placed on intellectual mercenaries in the media and academia to use new, more effective tools to dumb down the demos.

As growing segments of high-wage workers in the rich countries become the new victims of capitalism, will they slowly learn to see capitalism from the standpoint of its victims? In this new emerging reality, will orthodox economics migrate from its old centers in London, Cambridge and Chicago to new centers in Bangalore and Beijing?

A curious world this will be when seen from the old centers. In truth, this will only be a long-delayed correction to two centuries of unequal development, dominated by Western centers. Sadly, the correction will not go far enough: it will leave much of the world mired in poverty and disease.

The first part of article can be accessed from: The Demise Of Wall Street [1]

M. Shahid Alam is professor of economics at Northeastern University. This essay is excerpted from his forthcoming book, Israeli Exceptionalism: The Destabilizing Logic of Zionism.

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