The "Securitization" of international economic policy

Posted by Joshua Holland at 11:51 AM on March 27, 2006.

The attacks of September 11th marked the end -- at least for the foreseeable future -- of U.S. foreign policy. See, foreign policy is a big tool box, with a wide variety of handy tools, including diplomacy. This administration chucked that toolbox out the window, and now we have a security policy and a trade policy. The nut-jobs driving U.S. foreign policy at the moment believe that's all we need to play the game of international politics.

I've written before about the "securitization" of all manner of transnational issues -- what used to be about trade or the environment or human rights law are now "national security issues" (and therefore exempt from the democratic process) -- and nowhere has that been more true than in economic policy, where standing against Washington's prevailing economic theories makes you a "populist" (thinly-defined) at best, and a "dangerous anti-democratic force" at worst (see Chavez, Hugo).

That narrowing of what we call "foreign policy" has found its way into dozens of issue areas in the past few years. From Mattthew Rothschild, writing in The Progressive (via CommonDreams), we get the latest iteration:

Tucked away deep in the new "National Security Strategy" that Bush released on March 16 was some bad news for Third World countries: Bush wants the IMF and World Bank to shove the free market even further down their throats.

Chapter VI of that document is entitled "Ignite a New Era of Global Economic Growth Through Free Markets and Free Trade."

It boasts of all the new free trade agreements the Bush Administration has negotiated, and it vows to create a Middle East Free Trade Area by 2013. (It hopes to sign a free trade agreement with the United Arab Emirates, but that one may have been set back by the port controversy.)

The chapter warns of some challenges, including the fact that some countries have the audacity to "restrict the free flow of capital, subverting the vital role that wise investment can play in promoting economic growth." This, even though countries like China, India, and Chile that place some controls on capital flow have had much greater economic success than others and did not suffer the turbulence caused by capital flight that many countries contended with in the late 1990s.

There are two equally flawed assumptions on which the securitization of economic policies rest. The first is a whole series of poorly-tested hypotheses that spring from the "democratic peace" theory -- the idea that democracies don't fight wars (with each other). Somehow democracy and capitalism became intertwined -- essentially as a matter of faith -- in the minds of many thinkers (like Frank Fukayama in The End of History) and the appealingly simplistic idea that (economically) liberal democracies would be peaceful gained traction.

Without going into a lengthy critique (I buy some of it), let me just say that there haven't been a large number of democracies for long enough to make the empirical "evidence" for these ideas terribly convincing, and, worse yet, they require some definitional acrobatics. For example, democratic peace theory goes out the window if you include-- as commonsense dictates --proxy wars fought by democracies like the one waged between the U.S. and Nicaragua under the Sandinistas.

The other assumption is that financial and trade liberalization alleviates poverty, thereby decreasing the number of disaffected youths with too much time on their hands -- the main cause, according to much conventional wisdom, of terror and extremism.

We can have a lengthy debate about that point over the long-term, but it's not debatable that rapid liberalization leads to growing inequality -- with all its attendant social problems -- over the short- and medium-terms. The policies also have driven down agricultural employment, sending people to seek work in urban areas without adequate infrastructurre to support them. They've lead to human rights abuses, environmental damage and the loss of sovereignty.

As I've written before: "All of these processes breed resentment, sowing seeds that can result in extremism of one sort or another -- including terrorism -- and lead to violence, as well as violent reactions from security forces. We see this across the globe, from Nigeria to the Philippines to Colombia."

From those false assumptions, the National Security Strategy goes from bad to worse, according to Rothschild:

As for Third World countries with natural resources like oil, the chapter is quite clear: "The Administration will work with resource-rich countries to increase their openness, transparency, and rule of law," it says. This will "attract the investment essential to developing their resources and expanding the range of energy suppliers." By "diversifying the suppliers," the Administration says its plan "diminishes the leverage of irresponsible rulers."

It's hard to imagine less responsible rulers than our own, but they do exist -- think North Korea. While this section sounds good -- who doesn't want to diversify suppliers and increase transparency? -- the reality is that liberalization driven by ideology, instead of the particulars of any given country's economy, ends up wedging open markets for foreign investment where the rule of law is weak, and democratic institutions are lacking. Those investments, in turn, require military protection; foreign investment in those circumstances only aggravates conflicts.

In the piece I linked to above, I quoted Tony Clarke, of the Polaris Institute:

Great empires of the past learned that their colonial holdings and trade routes needed to be protected by military power against local uprisings and competing empires. The September 11, 2001 terrorist attacks against the United States demonstrated that the global economy was vulnerable, and economic elites demanded governments provide military protection for the system. Today, the Pentagon is realigning its vast international network of bases along the frontiers of the global economy, such as in Central Asia. In places like Columbia, U.S. troops and weapons are being deployed where uprisings threaten corporate investments.

This dynamic will only get worse as we skip down the backside of Peak Oil. Already, you can lay a map of U.S. military bases over a map of the world's major fossil fuel deposits and they match up almost perfectly.

Back to Rothschild:

In a section on "strengthening international financial institutions," the document amazingly urges the IMF and the World Bank to do more of what they do wrong.

It tells the World Bank to place even "greater emphasis on investments in the private sector."

And the IMF, which has been especially brutal, needs to be more so, the document suggests: "If crises occur, the IMF's response must reinforce each country's responsibility for its own economic choices. A refocused IMF will strengthen market institutions and market discipline over financial decisions."

Of the long string of failed neo-liberal economic policies that litter the capitols of the developing world, Noam Chomsky once said (and I paraphrase), for the True Believers, the only logical response to neo-liberalism's failures is to push through more neo-liberal policies. More and deeper; more trade and financial liberalization, more cuts in social services and more economic "adjustments" that end up punishing the most vulnerable in a society.

The result of our slavish devotion to this suite of policies has been anything but an improvemed national security.

** Big cheers to reader Chaoslegs for the tip.

Joshua Holland is a staff writer at Alternet and a regular contributor to The Gadflyer.