part 11

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Posted by Sadie from D006033.N1.Vanderbilt.Edu ( on Wednesday, April 30, 2003 at 0:51AM :

In Reply to: part 10 posted by Sadie from D006033.N1.Vanderbilt.Edu ( on Wednesday, April 30, 2003 at 0:50AM :

It’s easy to be cynical about the double binds – the rigged world trade system, to be blunt – faced by poor countries. And the bald contradictions of U.S. policy and preachments suggest, certainly, a degree of official cynicism. But nobody really wants to see economies stultify or implode (nobody except, perhaps, a financial specialists known as vulture capitalists), and the I.M.F.’s great efforts to prevent emerging-economy disasters with emergency bailouts, although frequently unsuccessful, seem basically sincere. The problem lies, rather, with the model.

Even market fundamentalists concede that corporate-led globalization produces both winners and losers. Why should the U.S. government look beyond a strict pro-business definition of the national interest? Because it is IN our national interest, especially in the longer term, to expand globalization’s circle of winners and to throw lifelines to the billions of people struggling to stay afloat in the world economic maelstrom. The U.S. currently enjoys a truly rare global preeminence – military, economic, pop-cultural. But power is not, obviously, the same as legitimacy. And every overweening, remorseless projection of American power, every unfair trade rule and economic double standard jammed into the global financial architecture, helps erode the legitimacy of American ascendancy in the eyes of the world’s poor. This erosion is occurring throughout Latin America, Africa, Asia. At the W.T.O., in response to worldwide protest against the high prices of AIDS drugs, the United States finally acceded, in November 2001, to a historic decision that public health should, after all, be a consideration in some areas of patent protection. Then, in late 2002, under pressure from the big pharmaceuticals, the Bush Administration quietly changed its position and sent Trade Representative Zoellick to kill an agreement allowing poor countries access to generic medicines. Few Americans noticed. But in Africa, and Asia, and all the countries directly injured by this decision, millions noticed.

President Bush had it all wrong about Al Qaeda and world trade, of course. Still, there was the long, horrifying groundswell of popular support for Osama bin Laden and the attacks on New York and Washington that surfaced, mainly in the Muslim world. The depths of hatred that the United States has inspired in some of the world’s more oppressed corners may be ultimately unfathomable. But the importance of trying to change that, of trying to inspire something less malignant with policies less rapacious, seems undeniable. As the Bush Administration has been discovering in its campaign against Iraq, even empires need allies.

Americans always overestimate the amount of foreign aid we give. In recent national polls, people have guessed, on average, that between 15 and 24 percent of the federal budget goes for foreign aid. In reality, it is less than 1 percent. The U.N. has set a foreign-aid goal for the rich countries of 0.7 percent gross national product. A few countries have attained that modest goal, all of them Scandinavian. The U.S. has never come close. Indeed, it comes in dead last, consistently, in the yearly totals of rich-country foreign aid as a percentage of GNP. In 2000, we gave 0.1 percent. President Bush’s dramatic proposal post-September 11, to increase foreign aid to $15 billion looks rather puny next to the $48 billion increase in this year’s $379 billion military budget.

Along with our delusions about foreign aid, there persists a more general belief about the rich world trying to help the poor, at least financially. In fact, the net transfer of moneys each year runs the other way – from the poor countries to the rich, mainly in the form of corporate profits and government debt servicing.

But it is simplistic, even misleading, to talk about whole nations as winners or losers under the current globalization regime, since there are, in every country, significant groups of both winners and losers. In China, with its remarkable growth rate and burgeoning middle class, tens of millions of people have been left unemployed and destitute in the upheavals caused by the arrival of capitalism, while millions more find themselves working seven days a week in dangerous, abysmally paid factory jobs. In dozens of countries, a dominant ethnic minority is reaping most, if not all, of the gains of economic integration while working-class and peasant majorities absorb the shocks and bitter downsides of trade liberalization. Even in the U.S., the foremost proponent of free trade and presumably its great beneficiary, there are those millions of good jobs that disappeared with globalization, leaving their former holders working non-union at Wal-Mart. There is a strong argument that the U.S. may be trading itself into oblivion, for it seems that we began, in 1976, running a trade deficit, leading to an international debt that has since ballooned to $2.4 trillion, or roughly 24 percent of GDP. Our major trading partners have yet to call in these debts, but the national balance sheet looks worse every year. With the economy threatening to slip into Japan-style deflation, life as a debtor nation could become quite unpleasant. In that event, globalization, certainly in this corporate-driven form, may start looking like a bad idea to more and more Americans.

Empire is expensive. The finances are tricky. Countries need to be bribed as well as bullied. A government that’s solidly in the fold can be sent on many errands: during the first Gulf War, Argentina, neoliberalism’s poster child, was the only country in Latin America to contribute troops. That was then. President Bush relies greatly, by his own testimony, on faith – and he does seem to possess the fundamentalist’s personal serenity on both the knotty, ambiguous questions of economics and on the far weightier matter of war. But the daily work of increasing American commercial supremacy, while binding the global economy into stronger, more tightly woven webs of integration, is not for the other-worldly. It’s being done quietly, in our name, by trade bureaucrats and proconsuls and “area specialists” even while our leaders speak soothingly of a rising tide of freedom (5). Restive countries, awakening to some notion of self-interest, may wander off the reservation, of course. More poignantly, transnational capital always has its own logic and pursues its own ends. While we make the world safe for multinational corporations, it is by no means clear that they intend to return the favor.

-- Sadie
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