The consolidation of capital

The Philippine economy is beginning to weaken, and apologists say, this is not the fault of the current administration. Our economy is reacting with the current efforts of the United States to revive its sagging economy, what with newly elected president Donald Trump projecting a 4% growth by next year. Economic analysts based in the US see a 2-3% growth, which, for all intents and purposes, is good already if it happens because for how many years, the US economy has not seen that rate of a growth.

Defnitely, the fed will increase interest rates and this will affect banks throughout the world. The banking system has been the willing partner of capitalists throughout the world and with higher rates, it will discourage smaller and medium-sized firms from lending, leading to difficulties in production. It will likewise protect US firms from being bought out by moneyed and international firms, and avoid capital from leaving the shores of the mainland.

Of course, we all know what would happen to other economies when the US flexes its muscles--somewhere, somehow, two or three medium and small size economies would weaken to allow this growth to happen. As I wrote in previous entries, when the US goes inward, it aims to become an imperialist power, which would translate into uneven trade relationships with its partners and other economies and markets around the world.

The formula in every capitalist system is predicated on production---monies are spent to enable production of goods and these goods are then sold to markets. Profits are then converted into capital, and the cycle continues. To further expand capital, it needs more markets and less competition. Crises are created when there are more competition in the market. Without innovation, capital fails to thrive and survive, leading to bankruptcies and death.

This is where it gets extremely worrisome---when innovation fails, and demands are low, capital deflate and it is now a function of conquering markets. In the olden days, capitalists solve these thru conquests. Now, it would be consolidation of capital.

There would be one universal market, with other markets connecting with this biggest of all capitalist markets. This explains why there is a universal trend leading to strong man rule because for this to be achieved, it needs force.

Markets and economies will collide, and some to collapse while others operate thru the mercy of bigger ones. What the biggest capitalist economy wants is a return to the status of the fifties and sixties when the US economy was the most dominant power on earth.

The question really is---is this attainable? Will the depth and extent of globalization really lead to an integrative system dominated by One?