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Globalization From the Top Down


“Economic globalization,” John Pilger has written, is “a project as old as gunboats” (“‘Humanitarian Intervention’ is the Latest Brand Name of Imperialism,” New Statesman, June 28, 1999). The historical link Pilger makes between imperial state violence and globalization finds expression in interesting places. One such place is the New York Times Sunday Magazine more than four years ago, where the Arab-baiting globalization enthusiast and Times columnist Thomas Friedman wrote the following as the Clinton administration initiated its bombing of Belgrade:

“The hidden hand of the market will never work without a hidden fist. McDonald’s cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley technologies is called the US Army, Air Force, Navy and Marine Corps…without America on duty, there will be no America Online.” (“A Manifesto for the Fast World,” New York Times, March 28, 1999).

The Neo-Liberal Prescription for Iraq’s US-Imposed Devastation

A more recent example is found in contemporary Iraq, devastated by three wars and two US invasions in less than two decades and a mass murderous, decade-long program of US-imposed economic sanctions. As world history’s most lethal military force continues its indefinite occupation of that nation, the top United States civilian administrator in Iraq, Paul Bremer III, has told Iraq’s United States-appointed Governing Council that, in the words of the New York Times, Iraq must “pry open” most of its “industries for foreign investment.”

According to a memo from Bremer to the Council, the Times reports, Iraq “must create an open economy in a region long protective of its domestic markets” and dominated by “socialist economic dogma.” The nation’s “future prosperity” depends on “how successfully it [can] attract foreign investment.” By overcoming its “socialist” and “protectionist” legacies, Bremer feels, Iraqis will “open a new lifeline for an economy starved of capital during Saddam Hussein’s regime” and “democratize” their economy. Bremer’s proposal, the Times notes, will “permit foreign investors to take their profits out of the country, with no requirement of reinvesting their money there.” (Richard A. Oppel, Jr., “U.S. Seeking Foreign Investment for Iraq,” New York Times, August 26, 2003. A10).

Bremer’s memo exemplifies the orthodox neo-liberal prescription for global development known as the Washington Consensus. According to this formula, imposed with imperial inconsistency (the wealthiest nations are curiously exempted from many of its key dictates) by the US and US-dominated world-financial and trade organizations (the International Monetary Fund, World Bank, and World Trade Organization), growth is maximized and poverty is alleviated when barriers to the free flow of capital, goods, currency, and services are dismantled and national economies are both subjected to the discipline and open to the opportunities of the world capitalist market.

The Neoliberal “System Isn’t Working at the Level of People”

Bremer’s “proposal” will be supported in its essentials by the former international banker and Washington DC lobbyist, Ahmed Chalabi, an American-educated (University of Chicago) neoliberal Bush favorite who chairs a Governing Council committee that is “studying” the memo. But the Iraqi people are well advised to take Bremer’s advice with more than a grain of salt.

After more than 25 years of global “development” along the supposedly “free-trade/free-capital” lines favored by the Bremer and Chalabi, the United Nations Human Development Program found that “global inequalities in income and living standards have reached grotesque proportions.” Globalization, according to the UN’s Human Development Report, was “concentrating, power and wealth in a small and privileged group of people, nations and corporations and marginalizing the others” – a judgment found curious support in the 21st-century vision statements of the US Space Command and the CIA.

Both agencies predicted increasing terrorist threats to “US national interests and investments” resulting in part from “globalization,” which they acknowledge (curiously contrary to official US statements on the universal benefits of “free trade”) to be widening the gap between the planet’s “haves” and “have-nots.”

The data bears them out. The income gap between the richest fifth of the world’s nations and the poorest fifth (measured by average national income per head) increased from 30 to 1 in 1960 to 74 to 1 in 1997. Between 1980 and 1999, economists Christian Weller and Adam Hersh have found, median income in the richest 10 percent of countries went from being 77 to 122 times higher than median income in the 10 percent of poorest countries. “In 1980,” Weller and Hersh note, “the world’s poorest 10 percent, or 400 million people, lived on the equivalent of 79 cents a day or less. The same number of had 79 cents per day in 1990 and 78 cents in 1999. The income of the world’s poorest did not even keep up with inflation.”

While the world’s 200 richest people (overwhelmingly from advanced northern states) doubled their wealth to $1 trillion from 1994 to 1998, more than 1.3 billion people in the developing world scraped by on less than one dollar a day-the World Bank’s benchmark for “abject poverty.” According to the Boston Globe at Millennium’s turn, “globalization” had “resulted in a boom for the wealthiest 20 percent of the world’s population and a bust for just about everyone else.”

Correspondent RC Longworth of the Chicago Tribune marked the passing of the 20th century by noting that the world’s “surging economy enriches a few” but “bypasses the rest.” In Longworth’s view, “the 21st century, like the 20th, began as a belle époque for those lucky enough to enjoy it.” But “things are very different” for the world’s “majority [who]…live in shanty towns on the outskirts of the global village.”

Longworth referred to “the rest of humanity” beneath the opulent minority: “millions of unemployed nomads in China, street people in Calcutta, European workers without jobs, the 28 percent of Americans whose jobs pay poverty-level wages, semi-educated young men in Morocco begging in four languages, the hopeless poor of Africa, child laborers in Bangladesh, the pensioners of Poland, the Russians wondering what happened to their lives.”

Particularly striking were reports from Russia, a celebrated new “democracy” and “open economy,” freed from the Satanic grip of “socialist” dictatorship. The Russian peoples’ enthusiasm for U.S.-led globalization and the related “march of freedom” and (the same things according to neoliberal and neoconservative doctrine) global capitalism was dampened by the fact that since the collapse of the Soviet “Marxist” state their nation had fallen into the worst depression ever experienced by an industrialized society. As John Lloyd, former Moscow Bureau chief for Financial Times, reported in the summer of 1999, in a New York Times article titled “Russian Devolution,” post-Cold War “Russians, free to get rich, are poorer.”

Further: “The wealth of the nation has shrunk-at least that portion of the wealth enjoyed by the people. The top 10 percent is reckoned to possess 50 percent of the state’s wealth; the bottom 40 percent, less than 20. Somewhere between 30 and 40 million [Russians] live below the poverty line-defined as around $300 a month. The gross domestic product has shrunk every year of Russia’s freedom, except perhaps one-1997-when it grew, at best, by less than 1 percent. Unemployment, officially nonexistent in Soviet times, is now officially 12 percent and may really be 25 percent. Men die, on average, in their late 50s; diseases like tuberculosis and diphtheria have reappeared; servicemen suffer malnutrition; the population shrinks rapidly.”

Thanks to numbers and stories like these, even World Bank president James Wolfensohn had to acknowledge three years ago that the neoliberal global “system isn’t working” at what he called “the level of people” – a rather significant level, one hopes.

“Do we have democracy,” asked Lula de Silva, leader of Brazil’s Workers Party in the 1990s, “only to have the right to cry out in hunger?” “Freedom without opportunity,” wrote Noam Chomsky in the same decade, in a critical study of global neoliberalism, “is a devil’s gift.”

Globalization From the Top Down

The recipients of this “devil’s gift” are not victims of globalization per se. Their difficulties stem from the “workings” of a top-down, privilege-friendly form of globalization under the command of Western capital. The dominant no-liberal model imposed by the US and the US dominated world financial and trade organizations “kicks away the ladder” of development from peripheral nations in the world system, preventing them from using the same policy methods that produced “successful” internationally competitive development in core states and “late-industrializing” semi-peripheral states. These policies include import restrictions, industrial policy, state-owned industries and extensive controls on foreign capital and exchange rates.

The US-favored model pits unfairly over-indebted “developing” nations against each other in an orgy of export competition while denying then (in the name of “free markets”) the right to protect their own domestic economies from the heavily subsidized exports of more “advanced” nations and incursions of heavily state-subsidized multinational corporations, based in the rich nations. It requires poor nations to sacrifice their food security and ecological balance and divert scarce funds from education, health care, social services and environmental protection and into the hands of wealthy bondholders and corporations as the price of admission to the world economy.

It drains tens of billions of dollars out of developing nations through the intellectual-property protectionism of the richest states – the costly, inefficient and often murderous patent monopolies enjoyed by corporations based chiefly in Europe and North America. It deregulates global currency and capital flows, leaving nations and governments hostage to rapidly shifting market sentiments and creating financial crises that cause suffering for millions. It privileges authoritarianism over substantive democracy since wages tend be higher and environmental protections stronger in more democratic states.

To make matters worse, it saturates the world with a flood of weapons, adding fuel to fires of violence and terrorism that are fed by the destabilizing consequences of corporate and financial globalization. It generates waste and destroys natural habitat at a rate that exceeds the earth’s capacity to regenerate and heal itself. It pillages and commandeers that which formerly belonged to the human and ecological “commons” for private and usually corporate profit, turning everything – water, land, air, animals, vegetation, health care, science, knowledge, culture, public space, human labor power, love, politics – into a commodity and a private investment opportunity.

No Wonder “Economic Globalization” Needs Gunboats, A-10 Warthogs and the B-2 Bomber

It seems almost superfluous to add that this type of global integration has nothing to do with “democracy.” As Edward S. Herman has noted, “the [top-down] globalization of recent decades was never a democratic choice by the peoples of the world-the process has been business driven, by business strategies and tactics, for business ends.” Top on the list of the relevant “business ends” is the weakening of popular sovereignty at home and abroad. Capital seeks through globalization to evade, subvert, and preclude popular and governmental regulation and to roll back labor power both in the core and on the periphery of the global economic system.

Democracy means one person, one vote, and equal policymaking influence for all regardless of wealth, among other distinctions. It is hardly conceivable that a democratically empowered popular majority of any nation or of the world would ever embrace this sort of world system. Is it any wonder that globalization on this model requires Pilger’s “gunboats” and Friedman’s not-so “hidden fist”? Is it any surprise that the dour, mop-headed Bremer is linked and indeed subordinated to the grizzled Pentagon gangster Donald Rumsfeld, who likes to quote Al Capone to the effect that “a kind word with a gun is better than kind word alone?”

Paul Street is the author of “Capitalism and Democracy ‘Don’t Mix Very Well’: Reflections on Globalization,” Z Magazine (February 2000): 20-24.

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