The Illusions of Global Capitalism

The project of economic globalization is much more complex than many
understand it to be. It is not merely the lowering of tariffs to make a
level playing field for international commerce. It is, as practiced by
the World Bank, the International Monetary Fund and U.S. foreign
policy, a plan to coerce all nations of the world into behaviors which
were once easily identified as markers of colonialism.

For example, ''structural adjustment'' is a term used to describe the
kinds of measures debtor countries are encouraged, or forced, to adopt
by the World Bank and the IMF. These amount to shifting resources away
from public benefit programs such as food subsidies and health programs
to concentrate on debt reduction. In other words, poor countries are
encouraged - indeed coerced - into giving up food and medicine so they
can use the money to pay debts owed to foreign banks.

Often the foreign debts were incurred when some regime borrowed money
to build infrastructure - roads, pipelines, power lines - to facilitate
natural resources extraction which was, in turn, being developed by
foreign interests. Sometimes that money was diverted - as in embezzled,
stolen, appropriated - by people in the regime.

There are many and complex ways countries get into debt, but the
ideology behind globalization involves exploiting these debts to
advance international capitalism and (mostly) American cultural
hegemony. The advice that accompanies the conditions for loan
extensions includes such things as encouraging people to speak English,
the international language of commerce. The problem is, many poor
countries have populations to which English is no advantage.

The debtor countries are encouraged to sell all assets, including
natural resources such as gas or oil, forests or mineral rights, to
outside investors. This is privatization to the advantage of foreigners.

Defenders of globalization like to point to the fact that in the search
for the cheapest labor, corporations sometimes build plants which bring
jobs to already desperately poor people who must now labor without
unions, environmental protections, or any kind of legal rights. It is
said, and in some anecdotal settings it is true, that some individuals
are better off. But the costs are usually unemphasized, and the threats
to the whole society are ignored in these accounts.

The mythology that surrounds capitalism is that it grew organically as
production, demand and wages fluctuated according to the rules of the
market. Historical globalization, as distinct from capitalism, was a
product of the British Parliament in the 19th century during a period
of military expansion and colonization. It was heavily subsidized, even
ordered, by the state. This included the use of powers of enclosure at
home and military coercion abroad. When those in power wanted
something, they found a way to take it. Without the power of the state
wielded in the interests of the investor class combined with overseas
use of military coercion, the kind of globalization that emerged in the
19th century is quite unimaginable.

One aspect of this ambitious project was then, and is now, the
privatization of the commons. The commons in England was rapidly turned
over to men of commerce who built sheep ranches on land formerly used
by peasants to grow food. The displaced English peasants were recruited
to jobs overseas and in factories at home; and ever since then,
historians and economic philosophers have asserted that this was a
happy ending. (Let's call this the British consensus on globalization
and empire-building.) It also enriched the rich, impoverished the poor,
and set into motion ecological transformations the world has come to
regret. Workers benefited to the extent labor movements were able to
demand better wages and benefits.

We are now seeing how this great contradiction of privileging the few
at the expense of the many is played out in democracies. In Latin
America, huge movements of the underprivileged are re-exploring
versions of socialism that are defined as anything but the Washington
consensus on globalization. The neoconservative vision that wealth can
be created by reducing and/or eliminating social services while
creating profitable investment opportunities for foreign investors -
the kind of model imposed on Latin American countries in recent years -
has proved both undesirable and impractical. Now that the United States
is distracted by the war in Iraq, societies as different as Argentina
and Venezuela are in full defiance of the Washington consensus because
they understand it doesn't work for them.

Indigenous peoples have led the way to roll back this war against the
poor. The first, in this modern context, were the Zapatistas of Mexico.
Mexico has been a particularly abused victim of neoconservative
economics, and the Indians are among the most acute sufferers. It is no
exaggeration to state that neoconservative economic policy has served
to destabilize Mexico politically and the Zapatista movement was
explicit in its assertion that globalization was at the root of
Mexico's problems. They were right. And in Bolivia, large grass-roots
movements were energized when an American company tried to privatize
all the water in a small city there. Since then, the mass movement has
continued to be energized, and at the end of 2005 it helped elect an
indigenous man, Evo Morales, as president.

American apologists are painting the Bolivia story as one dominated by
cocaine, but it is also dominated by a globalization program which is
threatening that country's small farmers, just as it threatens small
farmers in other countries and uses the powers of the state to force
''reforms'' which will lead to the local farmers' demise. Whatever its
merits, one of the consequences of globalization, especially in
democracies, is the rise of grass-roots movements opposing its
imposition.

Three books, each from an author with a distinct perspective, can help
those interested in the misguided dilemma of neoconservative economic
policy and U.S. foreign policy. Richard Douthwaite's ''The Growth
Illusion: How Economic Growth Has Enriched the Few, Impoverished the
Many and Endangered the Planet'' takes issue with the consensus in
Western culture that economic growth, as measured by economists, is a
desirable thing. Joseph Stiglitz, who won the Nobel Prize in economics,
worked in the Carter administration and served as chief economist at
the World Bank, explains that the Washington consensus on globalization
is not working in a landmark book, ''Globalization and its
Discontents.'' John Gray, an important political thinker in the
Thatcher administration and an intellectual of Britain's New Right,
argues that the globalization project has never worked for the
betterment of societies, and won't work now in an insightful volume,
''False Dawn: The Delusion of Global Capitalism.''