AlterNet

It's the Global Economy, Stupid

By Kevin Danaher, deleted
Posted on April 26, 2000, Printed on May 26, 2012
http://www.alternet.org/story/8446/it%27s_the_global_economy%2C_stupid

1. "Globalization" of "market forces" creates greater inequality. Over the past 30 years the globalization of the economy--led by the World Bank, the International Monetary Fund (IMF) and transnational corporations--has proceeded at a quickening pace. These institutions have pressured governments to remove barriers to the cross-border flow of money and products. Also, advances in telecommunications and computer technology have made it possible for trillions of dollars in finance capital to zoom around the world, 24 hours a day, searching for the highest rate of interest. But this globalization of market forces has greatly increased world inequality. Today the richest 20% of the world's population--in northern industrial countries--accounts for 83% of global gross national product, 81% of world trade, 94% of all commercial lending, 80% of all domestic savings and investment, and 94% of all research and development money. The richest 20% of the world's population consumes the overwhelming majority of the world's resources and produces about 75% of the world's environmental pollution. 2. Economic growth will not solve the problems we face. Well-paid economists keep reassuring us that if we can just get economic growth rates high enough, these problems will be solved. We regularly hear the refrain, "a rising tide floats all boats." But for those who don't own boats or have leaky boats, a rising tide means greater inequality between them and the more fortunate. The data shows that during a period of significant growth in world trade (1960 to 1989), global inequality got significantly worse: the ratio between the richest 20% and poorest 20% of the world population went from 30 to 1 to 59 to 1. We should also remember that unrestrained growth is the ideology of the cancer cell. 3. The real function of institutions such as the World Bank, the IMF is NOT to promote "development" but rather to integrate the ruling elites of third world countries into the global power structure. By getting third world elites onto a debt treadmill and promising them new cash flow if they implement policies written in Washington, the IMF and World Bank control third world policies without the direct controls of the colonial era. This is not a war between "north and south." It is a collaborative effort between first world elites and third world elites. Outsiders are allowed to enter the local economy and take away wealth in the form of natural resources or financial profits, and in return the local elites get a cut of the take so they can maintain the armies and police forces that keep them in power. Look at Mexico. That country now ranks fourth in the world (behind the U.S., Japan and Germany) for its number of billionaires, yet for most of the 85 million Mexican people life is more difficult now than it was ten years ago. If the ruling PRI party did not control the police and military, its blatant corruption and disastrous economic policies would not be tolerated for long. 4. The "free market" model being pushed on third world governments is not the one the industrial countries used to develop themselves. All the wealthy countries--the USA, Japan, Germany, England, France and the recent success stories such as Taiwan and South Korea--used a heavily state-interventionist model that had government play a strong role in directing investment, managing trade and subsidizing chosen sectors of the economy. The United States was in many ways the Òmother countryÓ of protectionism, showing other wealthy countries how to do it. Would we have a big electronics industry or nuclear power industry were it not for the massive government subsidy called the Pentagon? 5. The system is being rejected by millions of people all over the world. Globalization-from-above is controlled by wealthy elites and driven by a hunger for more wealth and power. But there is another form of globalization made up of grassroots alliances of human rights activists, trade unions, women's organizations, environmental coalitions and farmers organizations. This "globalization-from-below" calls for more openness and accountability by institutions such as the World Bank, the IMF and transnational corporations. It calls for raising wages, health and safety standards in the third world to bring them up to first world levels, rather than driving first world standards downward. It calls for stewardship of natural resources that will preserve something of the environment for our grandchildren to enjoy. It seeks to redefine self-interest so that it is more in line with the common interest of humanity. The choice confronting us today is which of these two global visions we prefer.

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