cj#1008> rn- Insanity & the Crisis of Globalization

1999-11-10

Richard Moore

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  Copyright (C) 1999, Richard K. Moore, All Rights Reserved
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Epilogue - an insane world on the brink of collapse

     Only when the last tree has died
     And the last river been poisoned
     And the last fish caught
     Will we realize that we cannot eat money.
     - The Cree

When an irresistible force collides with an immovable object, the result
must be a violent one - as when an automobile collides with a brick wall. An
irresistible force carries immense energy. When it collides with an
immovable object that energy is unleashed all at once - explosively. The
collision must destroy either the force, or the object, or perhaps both.
Humanity is today witnessing such a violent collision. This apocalyptic
collision is between the irresistible market forces of the global economy
and an immovable object - the life-support systems of the finite Earth.

Despite centuries of reckless exploitation of natural resources, the Earth
has has so far remained 'immovable' in its basic capacity to support life.
But as the scale of human activity has grown, this immovability is being
increasingly threatened. Our life-support systems are being stressed to the
breaking point. Indeed, important parts of those systems have already
collapsed entirely.

The Atlantic Shelf, for example, was at one time the world's most productive
fishery - it accounted for a significant fraction of the world's supply of
seafood. Local legend says you could lower a bucket over the side of a ship
and fish would just jump in. Today, due to the operations of city-size
factory trawlers, the Shelf's productivity has been reduced to a comparative
trickle. As a result, the trawler fleets move on to other fisheries,
systematically repeating the destructive pattern on a global scale.
Meanwhile, due to over-grazing and intensive agricultural practices,
irreplaceable topsoils are being destroyed and desertification is spreading.
Food supplies from land and sea alike are being threatened on a global
scale. Recent studies indicate that fresh-water supplies are being stretched
to the limits, and that major conflicts can be expected over water rights.

There are many different environmental crises - collisions with a finite
Earth - all rapidly approaching explosive dimensions. Population growth,
global warming, ozone depletion, acid rain, deforestation, pollution of air
and waterways - all of these stresses have global consequences that are only
poorly understood. For example, early predictions about global warming
presumed that temperature increases, if they occurred at all, would be
gradual and imperceptible. Instead, the effects seem to be showing up in the
form of hurricanes and floods of unprecedented violence and geographical
extent. The Antarctic ice sheet is beginning to melt, and there is a
particular continent-sized glacial shelf that is positioned to break free
all at once. If it were to slide into the sea, gigantic tidal waves would
race around the Earth and sea level would rise and permanently submerge
major coastal cities and low-lying areas.

History is strewn with the carcasses of whole civilizations that collapsed
when the resources they depended on were exhausted. Our own civilization is
global in scale - if it collapses humanity as a whole is threatened. We
don't know which dire environmental predictions might actually occur, or
which might occur first. Yet in our collective ignorance we plunge
recklessly ahead as a global society - accelerating our usage of fossil
fuels, generating ever-more pollution, and squeezing ever-more resources out
of an Earth stressed already to the breaking point. We are like a blind man
who charges ahead boldly, even though he knows he is near the edge of a
precipice. As a species, our behavior is not merely careless or imprudent -
it is suicidal and insane.

Individual insane behavior results from some kind of mental disconnect. The
part of the brain that controls behavior and makes decisions is somehow out
of touch with surrounding reality. Such a person is dysfunctional and can be
a danger to themselves and others. Similarly, our global society is becoming
increasingly dysfunctional. We live in a finite, fragile Earth, and yet we
behave as if unlimited economic growth and intensive development could go on
forever. They can't.

There is indeed a fatal disconnect in our global societal brain. The
decision-making part of humanity is dominated by a particular ideology - the
ideology of economic growth. Our very definition of a 'healthy economy' is
expressed in terms of the rate at which it is growing. This ideology at one
time seemed to be more or less functional. The nations which adopted it
industrialized and became wealthy and prosperous. The Earth seemed to offer
endless new territories and resources, and the growth doctrine, due to its
apparent success, became firmly ingrained, especially in the West.

A once functional ideology has become dysfunctional and yet it remains
globally dominant. This is humanity's mental disconnect; this is our
collective insanity - our dysfunctional, out-of-date growth ideology. By its
very nature, capitalism must have ever-more growth. Investors must have a
place to grow their stash or else the whole house of cards comes tumbling
down. The resulting growth ideology has become an irresistible force, and
increasingly it is colliding with the immovable object that is the finite
and fragile Earth. If the Earth's life-support systems collapse first, we
are all in dire danger for our lives. If the capitalist system collapses
first, we are in equal danger from economic chaos. Humanity is on an insane
collision course with disaster.

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                                   Part 1

                         Elites and global tyranny
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1. The crisis of globalization

     Globalization is not a policy choice, it is a fact.
     -U.S. President Bill Clinton, 1998

Subservience to the growth ideology is reflected in the modern term
'competitive'. In earlier times competitive referred to the ability of a
nation to compete on world markets. The term reflected efficiency of
production, competence in marketing, and a sound national economy. Today
nations 'compete' to attract investors and corporate operators. The term now
reflects lax regulations and low wages - and a sound national economy has
become irrelevant. Formerly nations competed on the basis of their economic
strength. Today they compete on the basis of their subservience to global
corporations and investors. Competitiveness has become a synonym for
friendliness to global capital.

Global investors seek those opportunities which offer the greatest promise
of growth for their funds. Thus in order to be competitive, a nation must
orient its policies around encouraging and supporting unrestrained economic
growth. The pressure to be competitive forces all nations to promote endless
economic growth, despite whatever social deterioration and environmental
degradation might be caused.

The doctrine of unrestrained growth has not always been so dramatically
dominant. What has promoted this principle to dominance has been the process
known as globalization. With globalization have come free-trade treaties,
giant transnational corporations (TNCs), a huge and unregulated global
finance market, and structural adjustment programs which are attached to
loans made by the International Monetary Fund (IMF). Each of these aspects
of globalization, in its way, contributes to creating a political and
economic climate where competitiveness prevails over all other social and
economic principles.

Free-trade treaties and IMF structural programs explicitly require nations
to submit themselves to investor preferences, regardless of local needs or
political preferences. Transnational corporations establish plants wherever
they find conditions most profitable to their operations - which means low
wages and minimal regulation over working conditions and environmental
safeguards. Unregulated financial markets - in which speculators can
transfer billions of dollars around the world by pressing a button - exert
further awesome pressure to be investor friendly.

The recent financial collapse of South Korea demonstrates the power of
unregulated financial markets, and it also dramatically illustrates the
difference between the old and new meanings of competitive. Right up to the
eve of its collapse, South Korea had been been universally acclaimed for the
strength and vitality of its tiger economy. South Korea was extremely
competitive - in the traditional sense of the term. But even the powerful
South Korean economy could not stand up to the speculative pressures of
international financial markets. Under these pressures South Korea's
currency collapsed, and the nation was forced to submit itself to structural
adjustments dictated by the IMF.

When the IMF was originally established in 1948, its charter was to
stabilize the international economy. In the case of South Korea, the
traditional role of the IMF would have been to lend South Korea a helping
hand in rebuilding its credit and re-establishing its economy. But
globalization has changed all that. Instead the IMF forced the further
destruction of the South Korean economy and ordered the liquidation of sound
domestic corporations. Korean production was thereby removed from glutted
international markets, creating room for growth for Western corporations.
Valuable Korean assets, such as factories, became available at bargain
prices to outside investors. Korea was transformed from being competitive,
in the traditional sense of strong, to being competitive in the modern sense
of subservient.

Despite its dysfunctionality, the process of globalization is continuing to
accelerate. Competitive subservience is becoming ever more firmly entrenched
as the central agenda worldwide. In 1995, the globalization process was
institutionalized in the form of the World Trade Organization (WTO). The WTO
has the power, by binding treaties, to overturn national policies whenever
those policies are deemed to be contrary to competitiveness. In every case
where the WTO has been asked to review a health, safety, or environmental
regulation, that regulation has been overturned. Even the almighty United
States must kowtow to WTO directives. Venezuelan gas refiners challenged
U.S. rules requiring that gas exported to the United States meet basic clean
air standards. The WTO ruled that the U.S. Clean Air Act was an "unfair
restriction on trade". In 1997, the U.S. Environmental Protection Agency
obediently changed the rules to allow foreign refiners to avoid U.S.
performance standards.

Officially the WTO is made up of nations, and its decisions are taken on a
consensus basis. On the surface, this arrangement would seem to protect the
interests of all nations, even small and weak ones. But that's not how
things work out in practice. The devil, as usual, is in the details. The WTO
process is in fact dominated by the trade delegates of the leading Western
nations, and those delegates are typically selected from the top ranks of
banking and industry. In other words, the WTO process is dominated by the
interests of an elite - the biggest international banks and corporations.
Despite its official structure, the WTO acts as the agent of international
capital. The U.S. Congress voted for the Clean Air Act, but the U.S. trade
delegation had other interests. The democratic process in Western nations is
becoming increasingly irrelevant - fundamental national policies are
determined not by that process, but rather by the dictates of elite capital
interests.

Although most people may not even have heard of the WTO, it functions in
effect as a centralized world government. It is dominated by the interests
of international corporations and financiers, and it has dictatorial power
over national governments. There is no appeal from its decisions; it is
restricted by no bill of rights; and its policies reflect no democratic
input. Without fear of exaggeration, one can say that today we live under an
elite capitalist global regime - even though few people seem to be aware of
it. No Western political leader would speak in these terms, but at the same
time every Western leader obediently follows the dictates of the WTO.

The WTO, the IMF, and the World Bank collaborate in enforcing a global
regime of subservience to elite capital interests. No doubt this terminology
is off-putting to many readers. It sounds a bit like something you might
read in in a Cold-War issue of Pravda or in the works of Karl Marx.
Nonetheless, this is the reality of our modern condition. Even though many
of us may revile Marx and his ideas about the "dictatorship of the
proletariat", his predictions regarding the "final stages of capitalism"
have come true in the process of globalization. He predicted that capitalism
would become global in its operations, and that national interests would be
sacrificed to the interests of capital. That is precisely what has happened,
and it has been officially institutionalized in the elite-dominated WTO,
IMF, and World Bank.

For the people of the West globalization has brought declining living
standards, reduced social programs, and the loss of significant sovereignty
to corporate-dominated international institutions. In effect, our political
leaders have abandoned constitutional sovereignty and have betrayed Western
democracy to elite corporate interests. But in the third world, the ravages
of globalization have been far greater. The West has been spared the worst -
for the time being - but once the WTO regime is firmly established in power,
the West will have little protection from the full consequences of 'investor
friendliness'.

As regards the third world, the case of Rwanda is particularly poignant.
Rwanda had enjoyed a reasonably healthy economy by third-world standards.
Half of the economy was devoted to agriculture, providing for the needs of
the local population. The other half was devoted to export coffee
production, providing the foreign exchange needed to purchase import
commodities. All of this was systematically destroyed when the IMF came
along and imposed one of its structural adjustment programs.

The adjustment program forced two critical changes in the economy. First, it
raised the price of petroleum so that farmers could no longer afford to
transport their goods to market. Second, it reduced the price paid to coffee
growers so that their operations became unprofitable. These measures totally
destroyed the economy. Famine and social chaos were the inevitable and
totally predictable result. Rwanda was forced into total collapse - much
worse than in the case of South Korea. When these conditions led to the
outbreak of genocidal civil war, the Western media said nothing about the
IMF dictates which caused the problem. Viewers were led to believe that
traditional tribal rivalries were to blame - that's just how things are in
the backward third world.

From the perspective of global capital, the intentional destruction of
Rwanda makes perfect sense. With Rwandan coffee removed from the glutted
international market, big corporate coffee producers were given more room
for growth and profitability. With the destruction of Rwandan agriculture,
Rwanda became a market for corporate agribusiness operators. These benefits
may not have amounted to much, by global standards, but they were sufficient
to warrant the destruction of an entire nation, leading to famine and
genocide. Such is the mentality of the elite corporate regime.

The IMF has little chance of recovering its loans from Rwanda, or from
Korea, but that is secondary. The goal of the IMF is not to be a successful
lending institution, but rather to serve the needs of international capital.
Besides, IMF funds come not from international bankers, but rather from
Western taxpayers. In the case of Korea, the IMF took those funds and used
them to carry out its so-called "bailout" of South Korea. The bailout money
did not go to South Korea, but went instead to cover the losses of the very
speculators who had engineered the crash. People in the West were deluded
into thinking the IMF was helping Korea. In fact, the taxes of those
Westerners were handed over to irresponsible global speculators, and the IMF
then undertook the systematic destruction of the entire South Korean
economy.

Globalization represents a dire crisis for democracy, for sound economics,
and for human welfare generally. In the next section, we will inquire into
the origins of globalization.

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For readers who want a more in-depth understanding of the crisis of
globalization, there are many excellent books available. The ones listed
below I have found to be particularly informative and insightful.

Michel Chossudovsky, The Globalization of Poverty, The Third World Network,
Penang, Malaysia, 1997.
Jerry Mander & Edward Goldsmith, ed, The Case Against the Global Economy and
for a Turn Toward the Local, Sierra Club Books, San Francisco, 1996.
Frances Moore Lappé, World Hunger, Twelve Myths, Grove Press, New York,
1986.
Hans-Peter Martin & Harald Schumann, The Global Trap, Globalization & the
Assault on Democracy & Prosperity, St. Martin's Press, New York, 1997.
William Greider, One World Ready or Not, the Manic Logic of Global
Capitalism. Simon & Schuster, New York, 1997.
Richard Douthwaite, The Growth Illusion, The Lilliput Press, Dublin, 1992.
James Goldsmith, The Response, Macmillan, London, 1995.


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