By Obi Nwakanma

Wall Street took a shellacking last week. Shares fell and rose like the yo-yo. It was the uncertainty that could nearly kill the faint-hearted. But of course, the bold trader, the true gamblers – for all that betting on stocks and currency and futures is gambling – staked his lot. Much loss happened last week. The pit of the trading floors be it at the commodity exchange or the stock exchange was bloody.

So, Wall Street was in trouble last week. The European and Asian markets fared no better. Markets collapsed and shares dipped – signaling the current global market interconnections. It is called “global capitalism” – one sneeze in New York and the Nikkei index catches cold. Even the once solid US treasury bonds turned cold and almost became junk bonds, to the point that China, the greatest buyers of these US bonds publicly made a terse statement to the Americans to shape-up.

The price of gold soared – an indication – which financial experts say – registers the clearly finicky state of the market. The US financial market tumbled from Standard and Poors downgrading of its triple A rating following much congressional manafiki.

The American legislators have been unable to resolveareas of spending cuts to social services and America’s humongous military budget, or agree on a new broad tax regime that would especially compel the super-rich who have done quite well for themselves under what has been described as the “Bush tax cuts for the rich” to pay higher tax to stem US deficits.

There is the very palpable feeling that the era of roses and wine are over in America, and that this requires a new hard-headed re-examination of the options open to it. Indeed, this is the crux of the matter in the US congress, leading to unresolved contradictions, ideological differences and subsequently the downgrading that pushed the markets into their skittish spin this past week. There is a great feeling of confusion all-round about a great nation that has entered a cul de sac.

I have also heard a bit of what Americans also love to call conspiracy theories, and this no less on the National Public Radio – the NPR – and no less on the “Dianne Rehm Show” that the current conundrum of the American economy, the lack of job growth and the terrible situation of unemployment is a ploy by big-money to squeeze the US economy, balk at creating employment, and help stage the conditions that might squeeze the Obama presidency into a one-term presidency.

There’s a lot under the hood, certainly, but I also think that Obama has not shown enough spine, the kind that required President Roosevelt, in a different era to carry out bold social reforms at an exact time like this, which created the “new deal” – a clearly socialist alternative to the social crisis following the stock collapse of 1929 with its lingering effects. Economic historians are bound to see the same parallels of 1929 – the global meltdown of the financial centers, the squeeze on energy resources; the conflict of exchange and subsequently, the Second World War.

It is the dead end of capitalism. In London this week, the shooting of a young man in Totenham, sparked off a wave of unrests and street riots, with lootings of stores and muggings. Soon, the riots spread to other cities in England  just as the Prime Minister of the UK ordered over sixteen thousand Bobbies on the London streets to quell the unrest.

Listening to Mr. Cameron’s speech last week, it is clear to me that the British Prime Minister, like the rest of the global elite, are generally unaware or specifically misinterpreting signs of the tsunami that is by the corner – a huge, incandescent public anger by an increasingly restless population without jobs, and increasingly without the safety-nets of public programs, and the disappearance of the middle class.

The London riots have much to do with these social conditions. It comes at the back of what the writer Naomi Kline calls “Disaster capitalism” – a strategic transfer of public wealth to an increasingly fewer and narrow elite with the consequence that a great number of the population are triaged through the economic doctrine that undergirds capitalism itself.

Western economies have functioned on this model since the 1970s, and have over the years forced the prescriptions of Milton Friedman down the throats of very weak postcolonial states like Nigeria from the middle of the 1980s which became the experimental grounds for what eventually became the central basis of high-capitalism: the reduction in investment in public infrastructure, education, health services, and other public welfare considerations.

It led to the strategic destruction of the middle class, and the shift of national resources towards private capital. It was called “privatization.” These policies came to high ground specifically in the years under Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom. While the Chinese quietly built up their economy based on what political theorists have called “state capitalism” and expanded public programs, the American and UK public sectors shrank.

The UK privatized its Rail system among otherstate enterprises under the conservative mandate, and the American economy was virtually ceded to fat-cow politics. The sum  total of the effects of this can now be seen with the migration of industry and production out of these places, because at the very roots of capitalism, of ceding public wealth to private hands, is the profit motive. Investors seek to make money at the least cost and the least risk.

They recruit fewer workers, they pay alittle more to a substantially fewer number of workers, indeed, they , move their tools an d plants, if it demands it in this extremely mobile times, to places where they can more easily exploit labor and natural resources. The American landscape is a vast terrain of closed shops and gutted factories.

In the old industrial belt of the Midwest, particularly in places like Detroit and Cleveland, we see the rust of abandoned industries and decay of cities; whole blocks abandoned and like ghost towns, because industry has fled under the magical cloak of “privatization.” The conditions imposed on Africans under the IMF and its Structural Adjustment Programmes has finally reached the west, with the demand that these economies cut, cut, cut – cut public spending on public health, public education, public transportation, public housing, and social welfare packages.

Reduce the value of their currencies, raise taxes, cut the public labor force and triage the weakest. Milton Friedman’s poisoned chalice. Just as the Greeks recently led the riots in Europe, and followed by the riots in London, more and more of these uprisings will be recorded in the coming months and years because, frankly, the model of capitalism that triumphed and created a complacent global elite since the 1980s has reached its dead-end. It is perhaps in recognition of this that the Nigerian president, Goodluck Jonathan surveyed the entire economic landscape and declared last week that the Nigerian government’s policy of privatization has failed.

It is an economic model that has not solved our human problems. It always fails. It failed the Ming Dynasty. It failed the Romans. It failed in the modern era, and compelled Marx and Engels to do a fundamental reassessment of its contradictions resulting in their “Labour Theory of Value.” It is dependent on sheer market fundamentalism – the very extreme belief that markets are their own spirits and are self- conscious and self-regulating. It creates the disjunction that wipes out the strategic middleground on which all economic progress, invention, and stability depends.

Historically, market capitalism has never created any civilization – never built cities, public parks, great industries, or even culture – civilization has always been the domain of well thought public pacts. And so, President Jonathan is right: privatization has never solved problems.

The privatization of publicly owned industry to a few hands is state sanctioned robbery of the public; it is the transfer of public wealth to a narrow community; it is the limiting of the capacity of the state to build and grow; manage its resources, create public work and employment, be the instrument for the redistribution of national wealth equitably.

The arguments against publicly owned industry by its opponents and by supporters of privatization is that publicly owned industries are inefficiently run and are over-bureaucratized. This is not always true. In Nigeria, it has been inefficiency created by conditions of nepotism. It can be easily corrected.

For a newly emergent economy it is important for the state to be involved in the development of public industry while it as well encourages private initiative in a competitive spirit that would sustain the economy and maintain economic balance and health.

As for the US, soon it’d have to realize that its future lies by moving away from Reagan-era economic doctrines that currently dominate its public policy to Roosevelt’s “new deal” of stimulating enterprise by massive investment in government programs and public works.

It saved American once. Jonathan too must learn something from that model, because globally, we seem to have come to that crisis of capitalism from which a necessary pull-back is imperative or we risk more global mayhem.