THE article: "Economics of Empire"

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Posted by Sadie from D006033.N1.Vanderbilt.Edu ( on Wednesday, April 30, 2003 at 0:40AM :

Ok, so I'm divvying this baby up, as it's about 15 magazine pages (no pitchers, either) long. Fingers, just a few more minutes, & then you'll be DONE typing.... Oh, I'm just dividing the article along all the article's breaks (in print). Pay attention, please.... There are LOT of things one can learn from this article, especially when attempting to visualize the future economy that a "democratic" government in Iraq will have to deal with. Pay particular attention to how the East Asian nations dealt differently with similar economic situations as many Latin American nations, & because of a few wise decisions, came out better off in the end than their Latin American counterparts....
The Economics of Empire: Notes on the Washington Consensus
By William Finnegan
Harper’s Magazine
May 2003

In early March, President Bush, on the verge of declaring war on Iraq, was asked at a press conference why he thought “so many people around the world take a different view of the threat that Saddam Hussein poses than you and your allies.” Mr. Bush replied, “I’ve seen all kinds of protests since I’ve been president. I remember the protests against trade. There was a lot of people who didn’t feel like free trade was good for the world. I completely disagree. I think free trade is good for both wealthy and impoverished nations. That didn’t change my opinion about trade.”

Mr. Bush’s “opinion about trade” tends to pop up in unlikely places. Shortly after September 11, 2001, he declared, “ The terrorists attacked the World Trade Center, and we will defeat them by expanding and encouraging world trade.” This was an odd conflation, and the New York Times, reporting his words, felt obligated to flag the president’s confusion with a delicate addendum – “seeming to imply that trade was among the concerns of terrorists who brought down the towers.” The United States trade representative, Robert B. Zoellick, was less delicate when he suggested in a speech around the same time that opponents of corporate-led globalization might have “intellectual connections with” the terrorists. The September 11 attacks were perpetuated, of course, by a genocidal death cult, not by unusually determined proponents of economic democracy.

But what the Bush Administration is signaling in these muddled formulations (and in many less muddled statements – and for that matter, in many major policy initiatives) is its transcendent commitment to a set of fixed ideas about international trade, finance, politics, and economic development. These ideas form a dogma – George Soros calls it “market fundamentalism” – that, as dogmas do, purports to explain everything, to fold every even into itself.

Sometimes known as the Washington Consensus (1), other times simply as “free trade,” this gospel has been the main American ideological export since anti-Communism (to which it is related) lost strategic relevance. It is promulgated directly through U.S. foreign policy and indirectly through multilateral institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization. Its core tenets are deregulation, privatization, “openness” (to foreign investment, to imports), unrestricted movement of capital, and lower taxes. Presented with special force to developing countries as a formula for economic management, it is also, in its fullness, a theory of how the world should be run, under American supervision. Attacking America is, therefore, attacking the theory, and attacking the theory is attacking America.

The possibility that the Marines and high-altitude bombers might need to be involved in spreading the good news about free trade does not, in context, seem far-fetched. Consider “The National Security Strategy of the United States,” issued by the White House in September 2002. Presidents are required to submit a security strategy periodically to Congress, but the Bush edition received an unusual amount of attention because of its unprecedented assertion of an American right to strike U.S. enemies preemptively, as well as its vow to maintain American military supremacy over all rivals indefinitely. Just as notable, however, in another way, was the repeated, incongruous insertion of fundamentalist free-trade precepts. The Strategy claims to have discovered “a single sustainable model for national success” – the Washington Consensus. There is, in its authors’ view, simply no other way. History has validated this messianic vision, and the American role in leading the world to its realization on this earth. “We will actively work to bring the hope of democracy, development, free markets, and free trade to every corner of the world,” the Strategy avows. It even provides a list of policy particulars, such as “lower marginal tax rates” and “pro-growth legal and regulatory policies” (read: weaker environmental and labor laws), that it believes every country should adopt.

National-security strategy outlines are written by committee, are full of boilerplate, and cannot be expected to withstand close literary inspection. Still, the Bush strategy’s attempt to articulate a worldview is worth quoting in full: “The concept of ‘free trade’ arose as a moral principle even before it became a pillar of economics. If you can make something that others value, you should be able to sell it to them. If others make something that you value, you should be able to buy it. This is real freedom for a person – or a nation – to make a living.” This formulation makes vulgar Marxism look subtle and humane. The only “real freedom” is commercial freedom. Free speech, a free press, religious freedom, political freedom – all these are secondary at best. There is a lockstep logic here, an airbrushed history, that suggest a closed intellectual system – the capitalist equivalent, perhaps, of Maoism or Wahhabism.

But beyond the triumphalist theory – and capitalism obviously has much to be triumphal about – there is the practice. The Washington Consensus has been around long enough now that results are in from many countries, including from some of the most diligent followers of its policy prescriptions. These results are less than encouraging. Argentina, for instance, did everything it was told to do by Washington throughout the 1990s – privatization, deregulation, trade liberalization, tax reform – and found itself a much-touted example of the virtues of neoliberalismo until shortly before its collapse in 2001. Today, Argentina is suffering through the worst economic crisis in history. Yet even major failures seem not to shake the faith of the true believers in the Bush Administration, who include the president. Like other fundamentalisms, market fundamentalism seems impervious to argument or inconvenient facts. Inside the muscular church of laissez-faire, broad-brush ideas – all of them estimable in the abstract – get rolled together into a mesmerizing, internally coherent mantra.

But vulgarity and obtuseness should not be mistaken for sincerity. Not only is the case for President Bush’s “opinion” that “free trade is good for both wealthy and impoverished nations” empirically feeble; there is plenty of evidence that rich countries, starting with the United States, have no intention of playing by trade rules and strictures they foist on poorer, weaker countries as “a single sustainable model.” We practice free trade selectively, which is to say not at all, and, when it suits our commercial purposes, we actively prevent poor countries from exploiting their few advantages on the world market. While President Bush extols a simple, sweeping, unexceptionable creed at every opportunity, however inappropriate, his administration, guided by figures such as Trade Representative Zoellick, pursues a far more complex and sophisticated agenda. Theirs is not an ideology of freedom or democracy. It is a system of control. It is an economics of empire.

-- Sadie
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