e-Imperialism
E-commerce isn't looking too healthy in the US today. The “new economy”
of the “dot coms” has shown remarkable similarities to traditional boom
and bust capitalist economies. If anything the rise and fall of the high-tech
marketplace is reminiscent of the less stable period of the 19th century.
To some extent in the United States that doesn't matter. So much money
is searching for so little profitable investment. While the prospect of
growth still exists, the collapse of innumerable companies has halted the
public floating of new ones, but not overall investment. In general the
high tech workers thrown out by the bankrupt dot coms are still finding
demand for their skills.
The extent of the business failure of e-commerce is impressive. In the
business to consumer (B2C) space almost every attempt to make money has
failed. A tiny number of loss-making companies such as Amazon.com pretend
to be thriving, but their core business growth is approaching zero.
In the business to business (B2B) area the most respected research organisations
are predicting that 90-95% of efforts will fail.
Not surprisingly the US is now looking at exporting these failing business
“models” to the Third World.
This promises significant benefits for US business, which will profit
in several ways. These include US domination of the internet infrastructure
industry, US control of huge numbers of patents and other “intellectual
property”, further penetration of foreign markets by US goods, due to the
dominance of US web sites, and theft of Third World tax sources through
direct sales.
US Secretary of Commerce Don Evans painted a wonderful picture in an
April address to Latin American trade ministers. Within the next three
years, he predicted, Latin American e-commerce would reach US$7 trillion.
What country wouldn't want a share of that?
But there were problems, Evans explained. The main one is that some
governments still haven't got the message about privatisation and market
liberalisation.
This is the song that US imperialism has been singing for the past two
decades: the way for a poor country to become rich is for the government
to remove any national investment restrictions and then sell everything
it owns (telecommunications, airlines, roads, whatever).
This will allow “market forces” to competitively drive down costs, create
massive business opportunity, and bring forth a flowering of investment
and prosperity. (One could ask why after the privatisation of the Mexican
telephone company Telmex in 1990 the rate for local calls jumped 1065%.)
So far so good. The US, as it traditionally does, is suggesting ways
that Third World governments, generally poorly positioned to defend their
national economies in any case, can pass any available assets to global
companies based in Europe, the US, Japan or possibly Australia.
But there is a further twist in the e-commerce case.
E-commerce is often promoted as a means for small business to compete
equally with large business, because any business can cheaply establish
a web site on the internet. In practice the main opportunity is for large
business to steal opportunities that were formally too remote, small or
inconvenient.
The prospect of large sections of the Latin American economy trading
on the internet is a mesmerising one for US business, which sees an opportunity
to penetrate into the area in a way previously unknown, due to national
borders, language differences and market fragmentation.
The only way that e-commerce could become a major feature of Latin America
in the coming years (not US$7 trillion, but still in the tens or hundreds
of billions of dollars) would be to massively transfer intra-Latin American
commerce into US-Latin American trading, at massive benefit to the US.
The current high tech stock crash occurs at a fortunate time for Latin
America, providing some warnings about the risks being presented by this
latest face of imperialism.
BY GREG HARRIS (gregharris_greenleft@hotmail.com)
