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 91×ÔÅÄÂÛ̳ 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)