Chapter 4: Constructing Another Globalisation (Part I), by Christophe Aguiton, Riccardo Petrella and Charles-Andé Udry
Let us look now at a text, produced by the collaboration of Riccardo Petrella (economist at the Catholic University of Louvain), Charles-André Udry [Swiss economist] and Christophe Aguiton (militant trade unionist, secretary of ATTAC). We will only consider the first part of this text, more analytic, leaving the second part for Part II.
The International Economic Forum met every year for almost twenty years at Davos, Switzerland, to rethink and re-orient the world economy according to the interests of capital. It brings together world powers and represents an important, albeit informal, environment to discuss world economic strategy.
Davos is no longer acceptable, it lives in the past
The priorities of the “Men of Davos” are not the ones of the inhabitants of the earth. Their priorities do not take account of the living conditions, needs, aspirations and capabilities of some 5 billion human beings, but are exclusively concerned with the interests of the social groups which, throughout the world, own the property and above all control decision-making regarding the allocation of the planet’s material and immaterial resources.
The choices which they have made at the political, economic and social level over the past thirty years, have in fact increased disorder, inequality within and between countries, and violence.
The “system” which they have produced - and which they reproduce with tenacity - is leaking from everywhere. Even among the “Men of Davos”, voices have multiplied demanding urgent reforms - right at the heart of the system, that is to say in current world financial architecture’. The fragility of this -- due, among other things, to exchange rate instability, market volatility, the development of derivatives, and to the structural deficiencies of the institutions (IMF and the World Bank) upon which the financial system rests -- is now admitted by all. The 1994 Mexican crisis and the Asian crisis since 1997, have been just major confirmations of this, and for which the price has been paid by local populations (more than 200 million people).
It is evident therefore that one cannot construct the future of the world based on the priorities of the “Men of Davos”. They represent a past which is unacceptable and intolerable.
The crisis has not just come out of the blue
The crisis is indeed the end-result of their choices. It has not just emerged out of the blue. A decade after having proclaimed the “end of history” and the arrival of a new world order of prosperity based on ‘democracy and the market’, globalised financial capital has subjected the majority of the planet’s working populations to the burden of international recession, which has spread out in leaps and bounds, from Asia: recession and deflation in the world’s second economy, Japan; recession and even depression m various east Asian countries, since the first quarter of 1997; the collapse of the Russian economy six years ago and financial bankruptcy in July 1998; brutal recession in the leading economy of Latin America, Brazil; the beginning of the downturn in the economies of the OECD countries.
The mechanisms of this international capitalist recession, the latest of which, to date, some would like to see as the first crisis of world capitalism, are well known: contraction in production and trade; deflationary trends; massive growth in the volume of loans accumulated by international banks on countries or on the major industrial and banking groups, loans which become transformed into irrecoverable debts; brutal capital withdrawals from countries by the major financial operators, which live from the revenue from parasitical investments in bonds, shares and other derivatives. All these reveal a crisis in the system which has become prolonged and exacerbated since the start of the 1970s.
The constructors of disorder, inequality and violence
Ronald Reagan’s “Star Wars’ and the technological advance of the OECD countries, along with the resultant productivity differential, accelerated the crisis in the Soviet economy, which was blatantly unhealthy ever since the end of the 1960s, as was confirmed by the first debate launched by the nomenclature on the urgent need for reform. The reformist efforts made by Mikhail Gorbachev, which emanated from what was called the ‘universe of bureaucracy’, rested on a fragile base. With the help of pressure from the West, it resulted in the implosion and collapse of the USSR.
The end of the so-called ‘cold war’ is certainly not to be regretted. The transition from a superpower duopoly, in terms of military power, to a world monopoly, however, has had, among other effects during the 1990s, that of destabilising the fragile balance upon which the international multilateralism of the United Nations had been able to function, well or badly, during the 1960s and 1970s (following the “defrosting” and decolonisation, both the results of social, cultural, democratic and national struggle).
The weakening of the U.N.
In ten years, the United Nations system has been delivered a knock-out blow - ironically the moment when, in 1995, it celebrated the 50th anniversary of its creation and, in 1998, the fifty years anniversary of the Universal Declaration of Human Rights. The “U.N. is dead” exclaimed the Belgian Foreign Affairs Minister on December 26, 1998, following the latest bombardment of Iraq by United States and British aircraft. Apart from UNICEF (the humanitarian agency whose finances depend on donations), the other “world’ institutions from U.N. such as UNESCO, the FAO, WHO, ILO, UNCED have all been considerably weakened. They are battling for their financial survival.
The spirit of international co-operation and solidarity (in the world of linked aid) is at its lowest point (the developed countries contribute less than 0.2% of their GNP whilst in 1980 they committed themselves to allocate at least 0.7 %). “Help yourselves, heaven will help you” or “Forget aid, compete”, this is the new doctrine as preached and imposed by the leaders of the most powerful nations. Thus, the only international organisations which have any real influence on world affairs are those economic and financial organisations (the World Bank, the International Monetary Fund, the World Trade Organisation..) where, often, decisions are influenced and even prepared by private organisations such as the International Chamber of Commerce, the Club of London (private lending banks), the multiple committees dealing with norms and standards. These organisations (WB, IMF, WTO) are financially dependent on the developed countries and are placed under their political control.
The reign of finance
The neo-monetarist credo imposed by the United States since 1971, the complete adhesion to “market forces” (which George Soros defined as ‘market integration’) and the consequent ripples, throughout the world, of liberalisation, deregulation and privatisation measures - have devastated politics, weakened the representative democratic institutions and colonised the state. Through the choices they have made, the “Men of Davos” have dismantled the welfare state and left to wither the mixed economy, the co-operatives, the mutual societies, the social concertation, which were certainly linked up with the strong trade-union presence in the United States and in Europe.
These decision-makers have overturned the enterprise structures through bursts of mergers, acquisitions and strategic alliances. The industrial and financial landscape is increasingly dominated by networks of giant enterprises which are outside all democratic political control (take, for example, mutual funds, pension funds, hedge funds etc.). They have changed the economic ethos (oikos nomos = rules of the house and oikonomos = the art of well managing the house) by sacrificing the objective of social well-being and full employment to the demands of the rate of profit and thus to increasing shareholder value.
They have overtly transferred power over to finance, and sovereignty over to monetary policy. They have imposed the independence of the central banks vis-à-vis politics but not vis-à-vis the financial markets and the feeble minorities who organise and exploit them in their own interests. They have reduced everything to the status of merchandise, including sport, art, culture, and even human beings (whose emblem is the liberty accorded to a patented human gene). Everything has become a resource to be exploited and made profitable. For the masters of this world, human beings have also become “human resources”.
The imposition of a world culture
They claim to have been promoting the emergence of a world culture, since they succeeded in imposing the globalisation of consumer markets for their products and services. In a world where priority is given to monetary accumulation and to the commercial value of ‘things’, they have helped amplify and globalise the phenomenon of corruption. The liberalisation of the movement of capital since 1974 has greatly facilitated the recycling of ‘dirty money’ -from the sale of drugs and arms through to that generated by white collar criminality - in legalised tax havens and, thanks to banking secrecy, through the financial and industrial organisations otherwise respected in countries ‘of excellence’ reputed for their professionalism and democratic institutions. In a time of predatory trade globalisation, they have even succeeded in corrupting the Olympic Games and their supreme organisation the IOC, which perhaps does not surprise connoisseurs of the history of this institution.
Thus when they purport to be promoting cultural diversity and the joy of living together, their globalisation has in fact -thanks to world television (such as CNN) the internet and global cyberspace, world tourist operators, credit card companies (Visa, American Express..) - succeeded in stirring up fear and rejection of others, intolerance and hatred through conflicts between civilisations which they cynically allow to be presented as a form of conflict which will dominate the future of the world.
The pillage of the ecosystem and the inequality of income
Added to all of this the ecosystem, Earth, is being continually pillaged. One paradox amongst others is that, when they talk of the integrated and desirable management of the planet, they do not mean how to avoid producing increasing amounts of waste and pollution, but how can these same wastes be managed in a profitable and privatised way? From whence come solutions based on the “market of the right to pollute”! These “Men of Davos” adore the objective of “zero inflation” but they mistrust that of “zero pollution”. The negative external effects (diseconomies, social costs) do not preoccupy them excessively. It is the cost of progress, they say: “humanity must pay if it is to advance”. Social injustice, social inequalities, discrimination towards women, all of which increasingly going hand in hand to the disadvantage of those concerned, together with the degradation of their close environment, have always existed, they say, and we will never succeed in reducing or eliminating them.
In reality, up until the middle of the 1970s, inequalities of income between the inhabitants of the same country tended to decline - excluding those who have a personal fortune or an inheritance - thanks to the redistributive effects of the State and of Welfare. Equally, the rate of growth of the inequalities between countries also declined. From around 1980, the inequalities between people have increased to new heights. According to the 1998 UNDP report on human development, income inequality between the populations of the richest countries and those of the poorest countries has increased since the beginning of the 1990s by a factor of 32 to 70.
World capitalist archipelago: globalisation is not everywhere
In short, speaking of globalisation, as do the ‘Men of Davos’, is simply a sham. The reality is that there is no real globalisation of society, economy, or human condition. There is no globalisation of political regulation, state or democratic institutions which provide guarantees and exert control over decisions affecting the various regions and populations of the world, in the general interest of the world at large.
What they have constructed, these past thirty years, is not a globalised economy, but the world archipelago of capitalist islands -large or small - where they have concentrated world scientific and technological capacity (more than 92% of world R&D expenditure, more than 90% of patents and of the installed computer capacity...),financial power, symbolic power and media power of the present time. The globalisation is taking place in the form of a growing polarisation of the international economy.
Some 30 cities represent the infrastructure, the brain and the heart of this archipelago: New York, Los Angeles, Chicago, San Francisco, Detroit, Miami, Toronto, Montreal, Houston, London, Paris, Frankfurt, Munich, Stuttgart, the Ruhr, the Dutch Ranstad, Copenhagen, Milan, Rome, Madrid, Barcelona, Stockholm, Tokyo, Osaka, Nagoya, Shanghai, Sao Paolo, Hong Kong, Singapore... In these cities lie the major business centres of the world, the hearts of the communication and information networks and the headquarters of the largest industrial, financial and commercial multinationals. Liberalisation, deregulation, privatisation and competition have tightened yet more the links between them than the links between them and the rest of the world. The famous “world village” is just an archipelago.
The “Men of Davos” say that the innovation which counts, is generated in and produced by these islands, certain of which have been elevated to the level of paradigms to be universalised (such as Silicon Valley). According to them, these islands are at the origin of the “new information society” and are in the process of engendering the “knowledge society”, the universe of dematerialised wealth and new knowledge. In this context, the only realistic option for other regions of the world will be to try to attach themselves, at any cost, to one of the islands of the archipelago in the hope of becoming an integral part of it. Those that do not succeed will, according to the ‘Men of Davos”, be inevitably cast adrift, they will not even be peripheral any more but “without a future”.
“Internet” teaching of literacy becomes a necessary step for the establishment of channels and bridges with the archipelago. For this reason, the construction of cyberspace pipelines and networks is becoming one of the major priorities everywhere, even more important than the installation of taps with drinking water, which are vitally needed by two billion people even today.
Clearly, current “globalisation” has expropriated life, and the right to basic living.
Expropriation of the future of the world
Expropriation phenomena have multiplied and been amplified everywhere such as, for example:
The human being, has been expropriated of his basic rights:
as a “human resource”, he/she only has the right to exist as a function of profitability and of what is now known as ‘employability’, a concept which has replaced that of the ‘right to work’.
Society has been expropriated of its raison d‘tre as a system for organising and promoting inter-personal and inter-institutional links with the corresponding interactions and transactions. It has been replaced by the market, elevated to the rank of ‘system’ and ensuring the optimal nature and organisation for transactions between individuals.
Work has been expropriated in its role as a creator of value and history: “Good” competing with other goods on the global market, his cost must fall continuously, using the leverage of globalised unemployment to achieve this.
Social life has been expropriated of its functions of identity and solidarity: value is only given to individualism, the logic of survival and the application of force in a context of warlike competition;
Politics has been expropriated of its fundamental power role of regulating, representing, controlling and being a democratic legitimising force: this role has been handed over to finance and to technocracy.
Culture has been expropriated of its variety, drama and its divinity: in its place has been put technology, numbing standardisation, violence of instincts and the barbarism of force.
The town has been expropriated of its function as a community area: it has been turned into a place of non-belonging, flux, speed, a place where one fits or one is lost in a permanent nomadic state without memory;
Democracy has been expropriated of its values of liberty, equality and solidarity: effective power has been given to a new world oligarchical class whose characteristic traits, values and methods of operation we are now starting to get a glimpse of.