Neo-colonialism: It’s not personal; it’s just business
23 September 2019
ADELAIDE - The sanctions imposed upon Iran by the USA are causing a huge amount of damage to that country’s economy.
The people of Iran, as distinct from the ruling regime, are suffering a great deal as a consequence.
What surprised me was that an apparently quite closed and tightly controlled economy like Iran’s was so susceptible to the influence of the US government’s edicts.
After all, Iran is an independent country run by an exceptionally nationalistic, even xenophobic, government. It has apparently worked hard to free itself from entanglement with and reliance upon the secular, capitalist west.
The USA, in particular, is reviled as the Great Satan. So why should Iran be so vulnerable to the whims of an erratic US president?
In seeking to answer my own question, I began thinking about the so-called post colonial era in which we now live. In particular, my thoughts turned to the phenomenon we label neo-colonialism.
Neo-colonialism is generally defined as the use of economic, political, cultural, or other pressures to control or influence other countries, especially former dependencies.
I think that this is the context in which this term is understood and used by most contributors to PNG Attitude.
However, I believe I may have made conceptual mistakes in thinking about this phenomenon by assuming, firstly, that it is largely restricted to former colonial dependencies like Papua New Guinea and, secondly, that it is usually the result of conscious policy decisions and actions by nation states.
When I recognised this, I decided to test my thinking by considering whether neo-colonialism is something that impacts upon my own country, Australia.
Initially, looking at land ownership, I discovered that only 10% of Australia’s agricultural land is owned by foreign interests, which was rather less than I expected.
Then I looked at Australia’s largest company, BHP Billiton. It turns out that the ‘Big Australian’s’ top five shareholders are, with one exception, foreign owned trusts. They are, in descending order of share ownership:
So, these five shareholders combined own more than half of what is Australia’s largest company. Contrary to the popular belief, carefully cultivated by BHP Billiton, foreigners effectively own and control the company, not Australians.
It did not escape my notice that all these shareholder companies are controlled by banks. Only National Nominees Pty Ltd is controlled by an Australian bank. This made me curious about who owned Australia’s banks.
Guess what? The top five shareholders in Australia’s banks are the same companies that are the major shareholders in BHP.
Between them they own 44.5% of Westpac, 43% of National Australia Bank, 49% of ANZ and 39% of the Commonwealth Bank.
HSBC, the parent of the largest of the shareholding trusts mentioned, has total assets of (I’ll present all this in kina) K8.8 trillion under investment across the globe, while JP Morgan controls a similar amount. The smallest, BNP Paribas, has ‘only’ K7.6 trillion to its name.
All of these numbers dwarf Australia’s annual gross domestic product of about K3.9 trillion. As for PNG, its annual GDP of K68.2 billion is trivial by comparison.
As you can see, these companies represent some very, very rich investors and can bring together resources that most of the world’s governments can only dream about. With serious money comes serious power and influence.
While the beneficial ownership of these trusts is virtually impossible to determine without access to their own records, it seems clear that they will mostly be non-Australians. So, it seems Australia is still effectively a financial colony, but we just don’t know it or, perhaps, prefer not to think about it.
Of course, in our capitalist system, there is nothing wrong or unlawful about foreigners owning shares in Australian-based businesses. Also, there is no reason to believe that these shareholders are especially interested in exerting influence over Australia’s political or domestic affairs.
However, when it comes to decisions that impact upon their ability to make profits, they will very definitely be interested and will express their views to the relevant politicians and business leaders. None of this will be done in public or, at least, very rarely so.
Instead, men (and, perhaps, a few women) in very expensive suits will meet with other men in very expensive suits and quietly but forcefully make their concerns and needs known. This is how capitalism has worked for centuries and nothing has really changed.
For example, the British East India Company controlled India for over a century and made vast profits for its shareholders, many of whom held key roles in the British government. The same can be said for the Dutch East India Company which governed what we now call Indonesia, as well as West Papua.
Unsurprisingly, for a very long time British and Dutch colonial policy was largely an expression of the demands and wishes of these first, huge multi-national companies. There was a symbiotic relationship between business and government.
These days there are no exact equivalents to the British East India Company but there are certainly international companies with enormous economic and financial power and reach (especially the technology companies like Google, Facebook, Apple and Twitter).
They have so much financial power and commercial complexity that governments find it very difficult to regulate their activities or even to extract taxation revenues from them.
That said, however, the symbiotic relationship between government and business still persists and sometimes allows governments to exert leverage upon business to achieve policy objectives.
This is why Donald Trump can cause so much pain for Iran, a country never controlled by the USA in the colonial era.
Simply by threatening to deny international businesses (especially banks and energy companies) access to the USA’s massive financial system and consumer market (still three times bigger than China’s), he can compel them to cease working with Iran. The economic impact upon Iran, with its comparatively modest annual GDP of K1.5 trillion, is devastating.
So, it seems to me that the phenomenon we call neo-colonialism is, in practice, merely an expression of neo-liberal capitalism in action.
It is not a carefully conceived methodology to reimpose colonialism by stealth, merely just the usual suspects in the business of exploiting all available means to make money.
To borrow the phrase popularly attributed to Mafia assassins before carrying out a hit, “It’s not personal, it’s just business”.
This being the case, people like me who revile and condemn neo-colonialism might need to recalibrate their thinking.
If it really is just business, then the correct target for criticism is the entire geo-political structure that underpins neo-liberal capitalism, not just a few ‘rogue’ companies or governments greasing palms to gain a political or economic advantage.
With the colonial era now receding into the past, an inherently exploitative system has found other (and vastly cheaper) ways to make money. There is no need to physically control a land or its people when the judicious deployment of economic power will work just as well, if not better.
This then is the situation that prime minister James Marape and his colleagues must confront when and if they attempt to seize back control of PNG’s assets from the country’s real financial and economic masters. I say good luck with that!
Call it neo-colonialism if you like but be under no illusions about it true nature and origins.
Bertrand and Dora Russell described the nature of education as follows:
"What is considered in education is hardly ever the boy or the girl, the young man or the young woman, but almost always in some form, the maintenance of the existing order.
"When the individual is considered, it is almost exclusively with a view to worldly success – making money or achieving a good position.
"To be ordinary and to acquire the art of getting on, is the ideal which is set before the youthful mind, except by the few rare teachers who have enough energy of belief to break through the system within which they are expected to work.
"Almost all education has a political motive: it aims at strengthening some group, national or religious, or even social, in the competitions with other groups.
"It is this motive in the main which determines the subjects taught, the knowledge offered, and the knowledge withheld, and also decides what mental habits the pupils are expected to acquire."
What Russell defined in 1934 we now know as ‘cultural reproduction’, which is the process and content that serve to legitimate both the institutions that recreate it and our own actions within them.
Much of this is reflected by Paul Freire in 'Pedagogy of the Oppressed' and Ivan Illich in 'Deschooling Society' and many other free schoolers.
Posted by: Bernard Corden | 27 September 2019 at 12:52 PM
The third way with its existential dialectic and metanoia has also produced some spectacular failures, namely Tony Blair with his princes of the dark arts, Alastair Campbell and Peter Mandelson. It merely degenerated into a regime of Orwellian doublespeak.
In Australia, who can ever forget the narcissistic Kevin Rudd with his programmatic specificity. I am sure Nicola Roxon and Peter Garrett wont be sending him any Christmas cards.
One of the best recent parliamentary performances has come from Mark Latham in his maiden address to the NSW Wales legislative council:
https://www.youtube.com/watch?v=Nz-Nzs92X5s
The work of Guy Claxton especially his books The Wayward Mind and Hare Brain Tortoise Mind are a fascinating read:
https://www.guyclaxton.net/
He has also collaborated with Fritjof Capra and James Lovelock.:
https://www.schumachercollege.org.uk/
Posted by: Bernard Corden | 26 September 2019 at 12:27 PM
"Radical education" sounds like bullshit, particularly when "consciousness of ourselves as individual beings" (i.e. with wants and needs as the foundation for private ownership = property) is where capitalism stems from.
So that what the article introduction expresses is, put simply, that humanity grew brains, learned how to learn and this is the production system that has successfully satisfied the desires of an ever growing human society.
Yates suggests that 'peasants and/or workers' need to be radically educated to basically revolt against the system.
Socialism is a demonstrated pipe dream.
Capitalism has manifested a nightmare.
Radicalism gets us no where towards a middle ground.
I disagree with the bulk of Michael Yates radical left agenda.
Posted by: Michael Dom | 25 September 2019 at 02:07 PM
Also worth a read from Michael Yates:
https://www.counterpunch.org/2019/09/20/radical-education/
Posted by: Bernard Corden | 24 September 2019 at 09:12 PM
“We are not just here to manage capitalism but to change society and to define its finer values.” - Tony Benn
“There is no moral difference between a stealth bomber and a suicide bomber. Both kill innocent people for political reasons.” - Tony Benn
“A faith is something you die for, a doctrine is something you kill for. There is all the difference in the world.” - Tony Benn
“Hope is the fuel of progress and fear is the prison in which you put yourself” - Tony Benn
Posted by: Bernard Corden | 24 September 2019 at 10:47 AM
Are you trying to suggest, Andrew, that the USA, Britain et al are not totalitarian states or that they don't export terrorism? I've got news for you.
As for that hoary old chestnut about there being no viable alternative to capitalism maybe you need to read a bit of anthropology. Papua New Guinean anthropology would be a good place to start.
Posted by: Philip Fitzpatrick | 23 September 2019 at 12:38 PM
In response to Andrew Brown's comment, I want to make it clear that I am not anti-capitalist. I am simply opposed to the form that it currently takes which, in many respects, reflects how capitalism worked during the late 19th century.
Much of late 19th century and 20th century politics was a reaction against the exploitation, fundamental unfairness and casual cruelty that underpinned the accumulation of wealth during the "golden age" of capitalism.
The socio-political responses varied from communist revolution and civil war at one extreme through to gradualist change to accommodate the needs and aspirations of the wider community.
The latter phenomenon has several names but I would characterise it as the rise of the so-called welfare state in its various forms.
What we are now seeing is a conscious attempt by the forces of reaction to wind back aspects of the welfare state in favour of an philosophy which puts all responsibility for life outcomes on the individual, essentially without regard to social and economic conditions.
This is a philosophical outlook which allows those who succeed in acquiring (or inheriting) great wealth to persuade themselves that it is all due to their personal genius and hard work.
This is, in my view, a completely erroneous and largely self serving notion, not a reflection of objective reality.
Andrew is right to say that those of us who detest the waste, extravagance and fundamental unfairness of the current neo-liberal system need to propose a plausible alternative, but that is a discussion for another day and, probably, another forum.
What I will say is that the alternative I have in mind is definitely not socialism or communism. Rather, it is a rebalancing of the capitalist system to maximise its benefits while minimising its harms.
This will not be easy or simple given the powerful interest groups invested in the current neo-liberal form of capitalism, but it will be done one way or the other.
History shows that the creation of serious imbalances in complex socio-economic systems will inevitably generate conflict and, very often, lead to war over the distribution of resources.
The great and the good can make their choice about the method by which a fairer distribution of social and economic resources is achieved, but what they cannot do is indefinitely resist growing social pressure for a better deal for the masses.
In 20th century Russia, the Tsarist regime chose intransigent resistance and their reward was dispossession and death at the hands of armed revolutionaries. What we think of as "the West", led by Great Britain, chose gradual reform.
The West has flourished while the USSR ultimately ossified and collapsed. Russia is still dealing with the consequences of nearly a century of socio-economic and political disruption.
The Chinese have, after huge upheaval lasting over a century, chosen to pursue a path that they call "socialism with Chinese characteristics" but which is recognisably a version of tightly state controlled capitalism.
Right now, they are doing well but signs of stress are appearing and they face many challenges in the future.
History provides a lesson here for all of us, if only we will see it, especially those who control organisations like HSBC or JP Morgan.
Posted by: Chris Overland | 23 September 2019 at 11:52 AM
The critical elements of neocolonialism or neoliberalism require reconfiguring:
Rule of markets
Attacking social services
Privatisation
Eliminating democracy
Deregulation
Turnbull spent almost a month in Manhattan immediately following his ousting and lands a role as senior advisor with the Barbarians at the Gate global investment brigand KKR along with John Bond, Leigh Clifford and Lim Hwee Hua.
Posted by: Bernard Corden | 23 September 2019 at 11:03 AM
Michael has nailed it. 'Dynamic tension'. The same applies to the concept of the Westminster system of combative argument in a controlled environment, e.g. Parliamentary rules governed by a Speaker.
When either side gets out of sync however, the tilt in either direction, right or left, is unhealthy.
The peculiar thing is that once the fascist right or the socialist left gets the upper hand, it all leads to the same result of then using authoritative methods to prevent any chance of losing the power of oligarchy that has been initially obtained by fair means or foul.
We haven't as a species yet evolved past that point in our evolution.
Posted by: Paul Oates | 23 September 2019 at 10:47 AM
The situation is worsened by the interdependencies of economies and markets. To get too immersed in economic capitalism is a sure walk down the alleys of exploitation by big business.
I tried to argue that the underlying traditional socio-economic character of PNG is one of independent existence. This independence affords us a strong platform on which to stand and reject neo-colonialism as you described it.
Our strength is the land. Ownership of and utilisation of the land and its bounties ensues that we are shielded from the whims of other people's actions and intentions.
A very important lesson PNG must learn from is the fact that we didn't feel any adverse effects of the global financial crisis when it happened. The reason is simply that we live off our land with very limited dependence on cash for our essentials.
But we are about to lose our competitive advantage. Land ownership and care for our natural environment from which we take to sustain our livelihoods is increasingly coming under threat of population explosion and the need to integrate into the capitalist economic trap.
Posted by: David Kitchnoge | 23 September 2019 at 10:46 AM
Underplayed the expansionism of China. Underplayed the export of terrorism by Iran.
Apart from that the rest, which was a diatribe against capitalism, which is OK if you can come up with a better model that doesn't end up in a totalitarian state. To date no one has been able achieve this.
Posted by: Andrew Brown | 23 September 2019 at 09:49 AM
Neo-liberal goals may not be worth achieving, and neither are socialist agendas.
Big business rules both sides of the political spectrum but the extremes of Left and Right are unacceptable.
What's required is dynamic tension.
Any politician who doesn't understand this is either being a brainwashed dumb-ass or purposefully deceptive.
Posted by: Michael Dom | 23 September 2019 at 09:39 AM
Also called soft power Chris. As practised by the Chinese.
The biggest threats to PNG's ordinary people are the Chinese and the Americans, in this case in the form of Exxon Mobil.
I think most people understand neo-colonialism in terms of big business rather than old fashioned imperialism.
Posted by: Philip Fitzpatrick | 23 September 2019 at 09:37 AM
Economic Hit Man, in its book form, Youtube https://www.youtube.com/watch?v=j1IvMLTQ6ew and widely shared as a PDF document, has been around for a long time.
A good chunk of Papua New Guinean politicians are not that silly and unlearned to ignore that.
Even Global Capitalism by good old Richard Wolff, exposes the abject falsity spewed by right wing nuts like Donald Trump.
https://www.youtube.com/watch?v=xfPEfn_7_Pg .
It is not intellectual theft. It is business that sees fair equity distribution and equality as a threat. Clearly goes to show that the West is running dog scared.
Posted by: Corney Korokan Alone | 23 September 2019 at 08:45 AM
Em tasol ia.
Neo-liberal capitalism is why Trump is in power.
Even the Democrats are ruled by neo-liberal ideals in action behind the scenes, e.g. Hilary Clinton.
It's no surprise that PNG politicians are clueless.
Peter O'Neill is also a puppet of neo-liberal powers.
Big business had interest in making Port Moresby the way it is today.
An economy needs a market place, and while this market is not necessarily a physical location consumers still need a place to live.
Posted by: Michael Dom | 23 September 2019 at 07:00 AM