DOCUMENTS ON GLOBALISATION.

29.10.11

Contents.

NATURE AND EFFECTS OF GLOBALISATION; General notes showing extensive commentary on the damaging effects of globalisation. (38 pages.)

EFFECTS ON LABOUR

EFFECTS ON WELFARE

SOCIAL DAMAGE

EFFECTS ON AUSTRALIA

ASSISTANCE TO BUSINESS

DRUG COMPANIES' BEHAVIOUR

EMPLOYMENT GENERATED BY CORPORATIONS

EVIDENCE ON THE SUCCESS/FAILURE OF NEO-LIBERAL POLICY

EXPANSION INTO EDUCATION, HEALTH AND WELFARE AREAS

FORCE IS NO LONGER NEEDED TO DOMINATE THE EMPIRE

GATS; GENERAL AGREEMENT ON TRADE IN SERVICES.

GLOBALISATION AS TAKEOVER

HOW DO THEY GET THE NEW RULES ESTABLISHED.

INCENTIVES FROM THE STATE TO GET CORPORATIONS TO INVEST.

MERGERS AND ACQUISITIONS; ACCELERATING.

PRIVATISATION.

RURAL DECLINE

STATE SPENDING BEING CUT.

TAKEOVER OF YOUR RESOURCES.

TAX; CORPORATIONS PAY LITTLE TAX.

THE MAI PROPOSALS.

THE ROLE OF THE STATE IN GLOBALISATION.

THE TAKEOVER OF PUBLIC SERVICES.

THE WORLD BANK AND INTERNATIONAL MONETARY FUND.

TRIPS AND TRIMS.

THE WORLD TRADE ORGANISATION; General comments.

THE WORLD TRADE ORGANISATION; Actual cases decided.

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NATURE AND EFFECTS OF GLOBALISATION; General extracts.

“… a study commissioned by the superstores themselves showed that every time a large supermarket opened, a net 276 retailing jobs are lost.” 33

Ecologist,, 30, 9, Dec.Jan 200-2001, p. 9.

Today capital is deploying a new strategy to assert its power and neutralise people’ resistance. Its name is economic globalisation, and it consists in the dismantling of national limitations to trade and to the free movement of capital.”

Peoples’ Global Action Network protests against WTO, Third World Resurgence, 95. P. 32.

How can the following be explained? Downer, Australian Minister of Foreign Affairs, said in 1997: ”Lets be clear: globalisation is an irreversible trend. Its under way. And it’s fine for all Australians, for the region and for the world.”

E. Fayner, Globalisation and the Australian economy”, ERA Newsletter, 12, 17, March-April, 2001, p. 4

“IN NO NATIONAL SOCIETY IN THE WORLD HAVE MARKET REFORMS AND RESTRUCTURINGS REDUCED RATES OF POVERTY OF CHILD MALNUTRITION AND STARVATION.” 147

Note, farmers are only allowed to plant registered varieties. (90) One might have wondered why peasants should be concerned by conditions seed supply corporations put on their products,…why don’t they just plant old traditional varieties.

V. Shiva, Stolen Harvest, South End Press,

J.McMurtry, The Cancer Stage of Capitalism, London, Pluto, 1999.

With the commencement of the NAFTA Mexican food imports increased from 20% of consumption to 43%, between 1992 and 19965. Half the peasants now do not get enough to eat.”

V. Shiva, Stolen Harvest, South End Press,

"The world is experiencing a new age of conquest, reminiscent of the days of colonialism. But whereas the protagonists of previous phases of conquest and expansion were national states, this time the drive for global domination is coming from big companies and conglomerates, major industrial groupings and the private finance sector. Never before have the world's masters been so few in number and so powerful...This conquest goes hand in hand with considerable destruction."

I. Ramonet, "The year 2000", email newsletter from BDyer@PROUT.lorg.nz, 15th DEc., 1999.

"The world economic and political system is experiencing its most profound transformation since emergence of the international economy in the 17th and 18th centuries."

Future Survey, 22.4, p. 12, April 2000, review of R. Gilpin, The Challenge of Global Capitalism, Princeton UP, 2000.

"The process of globalisation under capitalism is generating enormous misery, deprivation, and violence.'

R. Burbach, "For a Z:apatista Style Postmoderni Monthly Review, March 1946, p. p. 36.

“IN NO NATIONAL SOCIETY IN THE WORLD HAVE MARKET REFORMS AND RESTRUCTURINGS REDUCED RATES OF POVERTY OF CHILD MALNUTRITION AND STARVATION.” 147

J.McMurtry, The Cancer Stage of Capitalism, London, Pluto, 1999.

“A colossal concentration of economic power and control over the world means of production, resources and labour force, unprecedented in the history of capitalism, is taking place.”

S. Antonopoulou, “The process of globalisation and class transformation in the West”, Democracy and Nature, 6, 1, 2000, p. 37.

A case in point is the FAO study on the impact of agriculture liberalisation on 16 developing countries, which concluded that liberalisation under structural adjustment programmes had clear negative impacts, and similar measures required under the WTO [World Trade Organisation] Agriculture Agreement would thus have negative impacts as well.'

For the vast majority of developing countries, the lowering of tariffs and removal of import control and domestic support have undermined local food production and farmers' livelihoods in the onslaught of cheap subsidised imports.

L. Lin, “What is sustainable agriculture?”, Resurgence, 118/119. 2000. P 10

Globalization has been fortunate for some. For the vast majority,

however—especially for the peoples of the South subjected to unilateral structural adjustment policies, and those of the East locked into a dramatic social demolition—it has been a disaster. Henry Kissinger summed it up in a memorably arrogant phrase: ''Globalisation is only another word for US domination”

S., Amin, “Political economy of the 21^st Century”, Monthly Review, 52, 2, June, 2000, p. 15.

WIDESPREAD uncertainty about work and incomes and old age, among not only workers but the middle classes too, with one-third of the world labour force unemployed or underemployed; rising levels of child poverty, not only in the poor countries but also in some of the rich - this is the picture of the effects of globalisation in the 1990s brought out in the International Labour Organisation's (ILO)World Employment Report 2000.

“Globalisation has unleashed extraordinary inequality and insecurity”, Third World Resurgence, 118/119, 2000, p. 36.

It (globalisation) has effected a massive transfer of power, wealth and income from the poor to the rich, both within and between countries, and is contributing nothing to human welfare. On the contrary, it is rapidly destroying the environmental conditions essential for the continued existence of humanity.

E. L. Wheelwright, G. Argyrous and F. Stilwell, Economics as a Social Science, Pluto, 1996, p., 6.

A study of trade liberalisation in many countries that was conducted at

the World Bank by two economists, Lars Lundberg and Lynn Squire, was

cited then in support of the troubling observation that 'The costs of adjusting to trade reform are ... borne exclusively by the poor' (para 8.9, draft).

C. Reddy, “Hamlet with the pricne”, Third World Resurgence, 122, 2000, p. 8

So at the end of the century, an unopposed corporate agenda had “structurally adjusted” the world into a condition where social sectors and independent powers of elected governments had been more or less effectively reduced to impotence across the world. This was a “triumph of capitalism” that was more important than the victory over the alien Soviet system, for it broke the financial capacities of societies to further develop or even maintain their social programs and, through new “free trade” treaties, removed the rights of public authority to negotiate terms for access to their markets and resources.

J. McMurtry, "Civil commons", Economic Reform,Oct., (1999?), p. 10.

The new world order has been designed to protect the rights and freedoms of transnational corporations, not the basic human and democratic rights of people..."

D. Kennedy, "Discovering corporate rule", Essence, A Seed, 1, 3, Spring, 1995, p. 26.29

...international capital is out of control by virtually any national government...the power of the nation state to control its own economic destiny has been gravely weakened."

E. L. Wheelwright and G. Crough, Australia; A Client State, 1982, p. 2.

Power is moving from national governments to the supra-national agencies such as the World Bank.

National and local governments are increasingly powerless in a growing

number of spheres; national sovereignty is being reduced, in effect, in almost every arena of national jurisdiction. More and more national policies become subordinate to the demands of the global market and to the regulations, laws, standards, and enforceable deregulatory powers of

these international organizations.'

G. Temple, Globalisation and the Decline of Social Reform Toronto, Garabond, 1995~ E~_123.

...any state that deviates from 'responsible' economic policies will be punished by currency markets and bondholders."

S. Kapstein, "The new crisis of capitalism", Weekend Australian, 8-9 June, 1996.

The economies of the South are now being reopened to mining TNCs through structural adjustment and the liberalization of the global economy. Under pressure from the IMF and World Bank, more than 70 countries have changed their mining laws to make themselves more attractive to foreign investment; foreign ownership restrictions have been watered down or abolished; and mining TNCs are being invited to bid for state owned mining assets, as huge sections of the industry – from Brazil’s national flagship CVRD, the world’s biggest iron ore producer, to Zambia’s copper industry – are being offered for sale under ”free market” privatization programmes.

R. Moody, “Mining the world”, The Ecologist, 26,2, march-April, 1996, p 46.

In Norberg-Hodge's opinion, globalisation has done the same thing everywhere. It has triggered an international “race to the bottom” which threatens to impoverish people and ransack environments in every corner of the world.

D. Lester, Global Warning…

Transnational Corporations and Banks of the Five big powers are Colonising the World to an extent previously considered impossible.

Corporations are usurping the power of nation states... power is shifting to the World Trade Organisation, which is little more than a surrogate for TNCs and the banks that finance them.

Paul Hellyer, (Canadian Action Party) in E.R.A. Newsletter, Jan-Feb.2000]

Other indicators of poverty have also worsened under economic globalisation. According to the UNDP, financial volatility, job and income insecurity, crime, threats to health, food insecurity, loss of cultural diversity, community disintegration and environmental degradation have all increased. The greatest losers from all these trends are the poor. ..

The Ecologist Report, Globalising Poverty, Sept., 2000, p. 4.

Korten says transnational corporations are “…instruments of a market tyranny that is extending its reach across the planet like a cancer, colonising ever more of the planet’s living spaces, destroying livelihoods, displacing people, rendering democratic institutions impotent, and feeding on live in an insatiable quest for money.” This tyranny hits hardest at the poor. Viii

J. Madeley, Big Business, Poor People, Zed Books, 1999.

Note that the aim of GATS, the transfer of service provision by public institutions to private corporations, has been achieved in the Third World by Structural Adjustment Packages. These include the demand that public services be privatised.

M. Barlow, ,A GATS Primer, 20^th March, 2001, Era Email Newsletter, 22/3/2001-03-30

“…financial speculation has attained unprecedented dimensions in the advanced capitalist countries…casino capitalism.” 41.

The volume grew by 254% between 1989 and 1998, to $1.5 trillion, every day. 40.

S. Antonopoulou, “The process of globalisation and class transformation in the West”, Democracy and Nature, 6, 1, 2000.

“Approval of World Trade Organisation etc… agreements has institutionalized a global economic and political situation that places every government in a virtual hostage situation, at the mercy of a global financial and commercial system run by empowered corporations. This new system is not designed to promote the health and well-being of human beings but to enhance the power of the world's largest corporations and financial institutions.

Under the new system, many decisions that affect billions of people are no longer to be made by local and national governments but instead, if challenged by any WTO Member nation, would be deferred to a group of

unelected bureaucrats sitting behind closed doors in Geneva. The bureaucrats can decide whether or not people in California can prevent the destruction of their last virgin forests or determine if carcinogenic pesticides can be banned from their food; or whether European countries have the right to ban the use of dangerous biotech hormones in meat. Moreover, once these secret tribunals issue their edicts, no external appeals are possible; worldwide conformity is required. A country must make its laws conform or else face perpetual trade sanctions.

At risk is the very basis of democracy and accountable decision making

that is the necessary undergirding of any citizen struggle for sustainable, adequate living standards and health, safety, and environmental protections. The decline of democratic institutions in favour of deepening multinational corporate power has taken place in Western nations over the past several decades; but the establishment of the World Trade Organization (WTO) marks a landmark formalization, strengthening, and politicalization of this formerly ad hoc system.

Best described as corporate globalizatlon, the new economic model establishes supranational limitations on any nation's legal and practical ability to subordinate commercial activity to the nation's goals. The objective is to overrule democratic decision making on matters as intimate as food safety or conservation of land, water, and other resources…

From the corporate perspective, a good new system eliminates barriers to trade on a global scale, whereas from any other perspective, such barriers —that is, any nation's laws that foster economic well-being, democratic processes, worker and citizen health and safety, and sustainable use of resources—are seen as valued safeguards on unfettered, harmful business activity. From a corporate perspective, the diversity that is a blessing of democracy is itself the major barrier.

The Wall Street Journal was more direct. After the agreement was signed, the Journal editorialized that GATT "represents another stake in the heart of the idea that governments can direct economies. The main purpose of GATT is to get governments out of the way so that companies can cross jurisdictions (i.e., national boundaries) with relative ease. It seems to be dawning on people . . . that government is simply too slow and clumsy to manage trade." Should it be corporations, then?

What makes such statements especially alarming is that what is being characterized as "trade" these days includes the workings of a large portion of each nation's economic and political structures. GATT and other trade agreements have moved beyond the traditional roles of setting quotas and tariffs and are instituting new and unprecedented controls over investment flows, innovations, public assets, and democratic governance. Undermining national and local laws and erasing economic boundaries via capital mobility and "free trade" have caused the likes of Monsanto, Pfizer, Citicorp, General Motors, Cargill, Shell, and other corporations to rejoice. But the prospect of global commerce without democratic controls suggests impending disaster for everyone else in the world.

R. Nader and L Wallach, “GATT, NAFTA and the subversion of democratic process”, In J. Mander and E. Goldsmith, The Case Against the Global Economy, 1996, 93-95.

The world is experiencing a social and economic watershed transformation as great as the agricultural and industrial revolutions. Nation-state authority is being replaced by transnational corporations operating outside national law and protected by global trade agreements….

These companies seek what they call a global level playing field; they want to be free to move across borders with little interference; be governed by the lowest common standards and regulations regarding food safety, the environment, or social security; and they want governments to get out of the way.

And governments are complying. Because they can no longer tax the huge profits from big business they are left implementing the kinds of economic reforms” that will attract corporate investment. They are divesting themselves of the responsibility to set standards, laws and regulations, turning social and economic decisions over to the free market.

M. Barlow, “Class warfare”, Frontline, 36, July, 1996, p. 13.

In the name of global competition, our governments are massively handing over power to the private sector… The results of these policies have been devastating for most Canadians. Several hundred thousand jobs and many hundreds of manufacturing companies have been lost to low wage American states. Record levels of unemployment…are accepted as normal. We are creating a contingency workforce of part-time, low-wage jobs with no security and few benefits. Income disparities are growing among us…

Canadian business pays only 7.5% of tax.

To put it simply, we are now living in a new political era – the age of corporate rule.

M. Barlow and T. Clarke, “Global competitiveness and corporate rule; the Canadian experience”, Frontline, Aug., 1997, p. 8.

"The global economy is leaving millions of disaffected workers in its train. Inequality, unemployment and endemic poverty have become its handmaidens."..."Just when working people most need the nation state as a buffer from the economy, it is abandoning them."

"Growing income inequality, job insecurity and unemployment are widely seen as the flip side of globalisation."

"...any state that deviates from 'responsible' economic policies will be punished by currency markets and bondholders.”

E. Kapstein, "The new crisis of capitalism", The Weekend Australian, 8-9 June, 1996.

(Globalisation marks the coming of an era in which governments are giving up the responsibility for controlling society… All is to be left to the market to settle…Decisions by corporations increasingly determine economic affairs. Politics does not determine our fate now, economics does. It is not the result of public discussion and decision about what is preferable.)

"The general trends of capitalist development in the industrial nations hindered less and less by national social and economic reform. As a result, there is a progressive increase in economic inequality, with structural unemployment and poverty growing continuously; the trends in planetary pollution and environmental destruction continue to deepen. There is a decline in national sovereignty, with autocratic rule and coercive social control gradually becoming more common and alternations of the party in power increasingly meaningless; and there are widespread legislative assaults on wages, trade union rights, and labour standards."

We have arrived at the end of the era of the nation state. P. 56.

The tax burden is falling increasingly on the working class. There is…

rapid increase in prisons; the state is cutting s , on everything, except prisons. By 2000 there will probably be 4 million people in US prisons. 117.

"In the industrialised nations...the standard of living of the working class has been in slow decline for years."

Power is moving to supra-national agencies, such World Bank. National governments are increasingly powerless.

With all this goes a loss of legitimacy; discontent, apathy and willingness to resort to unofficial means, including terrorism. So the state will have to become more repressive.

Capitalism was limited by the unions, the state and its large bureaucracy and by democracy; all are now fading. Democracy in the sense of participation and stress on rights is in decline.

"Transnational corporations, the international markets, and supranational structures (e.g., the World Bank and World Trade Organisation) are increasingly taking over state planning and administration of the economy. 145.

There is no alternative agenda. The Left is of no significance now.

G. Temple, Globalisation and the Decline of Social Reform, Toronto, Garabond, 1995.

The death toll resulting from restructuring along market lines:

The UNESCO study tries to estimate them. For example, in Russia they estimate about a half-a-million deaths a year as a direct result of the reforms, meaning the effect of the collapse of health services, the increase in disease, the increase in malnutrition, and so on. Killing half-a-milllon people a year, that's a fairly substantial achievement for reformist economists. You can find similar numbers, though not quite that bad, in the rest of Eastern Europe, if you look at death rates from malnutrition, polarlzation, suffering. It's a great achievement.

If you go to the Third World, the numbers are fantastic. So for example, another UNESCO report estimated that in Africa about half-a-million children die every year simply from debt service. Not from the whole array of "reforms,. just debt service. About eleven million children are estimated to die every year from easily treatable diseases. Most of them could be overcome by a couple of cents' worth of materials. But the economists tell us that to do this would be interference with the market system. It's _ _ not new. It's very reminiscent of British economists during the Irish famine in the mid-nineteenth century, when economic theory dictated that famine struck Ireland must export food to Britain, which it did, right through the Irish famine, and should not be given food aid because that would violate the sacred principles of political economy. These principles typically have this curious property of benefiting the wealthy and harming the poor.

N. Chomsky, Keeping the Rabble in Line, 1994, p.

Just one example of how global corporations benefit from this is the Nike corporation. Its shoes, selling at around $200 || in Australia and other parts of the world, are produced by 75,000 independent contractors in low income countries many of the workers are women in Indonesia. They earn less than 20 cents an hour, unions are forbidden, and strikes are broken up by the military. In 1992, it was reported that Michael Jordan received US$20 million for promoting these shoes - this is more than all the women who made them were paid.

Development Bulletin, 40.

Extending free trade is supposed to benefit all, yet the emergence of a global economy, rather than eliminating poverty, has significantly widened the gap between ricand poor nations. Instead of affluence spilling over from the wealthy nations into the poorer ones, the exact opposite is

occurring. Cities around the world are filled with those who

came seeking opportunity and have instead joined the vast

army of homeless, unemployed, illiterate, drug-ridden, derelict,

and effectively disfranchised.

R. Terry, Economic Insanity, p. 15.

The transnational corporations are "...job liquidators on a grand scale, unparalleled in the history of industrial ism. Over the last decade the world's largest 500 have shed over 400,000 workers each year. Further, fixed term employment is being swiftly replaced by part-time non-unionised labour....In two decades a full month of labour time has been added per year in the USA. In all OECD countries there has been in recent years a sharp fall in labour’s share of the gross domestic product, and a parallel rise in the share of profits.

F. Clairmont, The Rise and Fall of Economic Liberalism, Third World Network, Penang, 1966, p. 48.

They argue that free trade will enable economies in the South to develop,

thereby creating new jobs. However, the reality is that millions of people now involved in rurally-based local production will be forced into unfair competition with large-scale, capital-intensive production across the world. This is especially true of small-scale, 'inefficient' family farmers, many of whom will be driven or lured off the land towards urban employment. Corporate agribusinesses will increasingly dominate food production, making it more 'efficient' by eliminating farmers and relying instead on heavy inputs of chemicals and energy. Of the displaced farmers, a few will find work at subsistence wages in a transnational corporation's factory. The majority will join the dispossessed in rural slums.

Globalization is levelling diverse cultures into a single, Western monoculture. A fully global economy would leave no place free from corporate market forces. There would be no resource that could not be commodified, no one who is not a consumer. It would be a world in which virtually everyone eats the same food, wears the same clothes, uses the same materials to build their homes, and responds to the same televised media images. This would be ideal for huge, corporate enterprises, which would: benefit from vastly expanded markets and economies of scale. But for the earth's many hundreds of diverse cultures and their countless traditions of location specific knowledge, it would mean extinction. The global village has room for only one culture: Western, corporate-led, industrial.

Ladakh Project Newsletter, 14, 1994.

In the name of the public good the technologies of globalisation (…proceed…) at the expense of more diversified and sustainable local and regional economies. Today, despite proclaimed shortages of cash for other purposes, one

national government after another around the world is investing billions of dollars to scale-up and speed-up the transport and communications infrastructures, creating a tight grid around the entire world to accommodate the needs of expanded trade and a unified global economy.

The scale and reach of these infrastructures is now such that further expansion benefits large-scale producers and long-distance marketers at the expense of local and regional enterprises In Europe for example it has been estimated that 37,000 small shops will soon disappear, replaced by must 300 supermarkets. All across America, thousands of locally owned businesses have been driven under by huge corporately-owned businesses.

H. Norberg-Hodge, “Global techno-economic treadmill”, Real World, 6 Winter, 1994, p. 8.

“The process of globalisation under capitalism is generating enormous misery, deprivation and violence.”

R. Burbach, “For a Zapatista Style Postmodernist Perspective”, Monthly Review, March, 1996, p. 36.

The 1980s marked the end of the effort to reform capitalism, to make it more just. 2

In the late 1970s there “…was a decline of social reform everywhere in the industrialised nations.” 71

Chile was the first market society; i.e., not just an economy but a whole society operating on market principles.

“The idea that politics determines national policies has gradually dissipated, and in its place has come the open assertion that economics is the deciding factor in more and more aspects of society.” 3.

G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.

“Deregulation of financial markets, the elimination of tariffs and barriers to free trade, privatisation, a widening gap between the rich and the poor, declining living standards, high unemployment and the cutting back of public services and the dismantling of the welfare state have become conventional economic wisdom in the countries of the English-speaking world…”

J.Ife, Community Development, 1995, p;. 94.

Globalisation has failed: “The impression has been engineered that globalisation is highly successful. "This is fallacious. ...globalisation has been marked by substantial declines in rates of output, productivity and investment growth...greater volatility of financial markets and increased risk, real interest rates have risen substantially...”

“...globalisation so far has been a productivity failure, a social disaster and a threat to stability.”

E. S Herman, "The Threat of Globalisation", Economic Reform Australia Newsletter, 2nd Dec., 1999.

"We are now pretty obviously facing the possibility of a world that the supranational corporations, and the governments and educational systems that serve them, will control entirely for their own enrichment -- and incidentally and inescapably, for the impoverishment of all the rest of us. Th is will be a world in which the cultures that preserve nature and rural life will simple be disallowed."

W. Berry, "The death of the rural community", The Ecologist, 29, 3, March/April, 1999, p. 183.

"...even the worshippers of free trade have produced little evidence that it is of any great value to humanity as a whole. World trade has increased by eleven times since 1950 and economic growth by five times, yet during this same period there has been an unprecedented increase in poverty, unemployment, social disintegration and environmental destruction."

E. Goldsmith, "Increasing trade - Increasing pollution", The Ecologist, 29. 2. May/June, 1999, p. 179.

"Those who gain from internationalism are the strongest and most competitive; those who lose are the weakest and least competitive." Globalisation "...is seen as a model that may produce a higher level of total production, but only at the cost of insecurity, social imbalance and instability."

J. Moller, The Growing Challenge to Internationalism", The Futurist, 33.3. March, 1999, 22-27.

The period from the 1960s to the 1990s has been "...marked by seriously deteriorating social conditions in most of the industrialised world."

From a summary of F. Fukuyama, "The Great Disruption", The Atlantic Monthly, May 1999, 55-80.

"If you are, roughly, in the top 20 per cent of the income scale, you are likely to gain something from neo-liberlaism and the higher you are up the ladder, the more you gain. Conversely, the bottom 80 percent all lose and the lower they are to begin with, the more they lose, proportionally."

S. George, "A short history of neo-liberalism", The Global Policy Forum, reported in, ERA Email Network, 17th July, 1999.

"...poverty is increasing around the world...this is not just by accident but by the design of a small, powerful banking and business elite at whose behest the World Bank and the International Monetary Fund have provoked "economic and social collapse" in many countries." (p. 11.)

"...the big banking and financial organizations orchestrate collapses...by demanding payment of debt service charges and then lending money to cover the charges but only on condition the recipient country impose such measures as austerity, privatisation and currency devaluation. The impact is usually destructive..."

J. O'Neill, "Swimming against the mainstream economic currents", (interview with Chossudovsky), Monetary Reform, Fall/Winter 1998/1999, p. 11.

"The speed at which people are being impoverished all over the world...is something that is unprecedented in modern history. It far exceeds the impacts of the Great Depression of the 1930s...in Indonesia, Thailand...from one day to the next the standard of living collapsed by 70 or 80 per cent..."

In the restructuring organised by the World Bank bankruptcy is "programmed"; i.e., "The World Bank will identify a set of companies and state enterprises sector by sector and they will put crosses on the ones that they think should be liquidated...the assets of state enterprises or private sector companies are put on the auction block and then sold at bargain prices to foreign investors. Those which are not put on the auction block are liquidated."

In Yugoslavia between 1989 and 1990 such programs made over one million workers unemployed. The IMF "...demanded the freeze of transfer payments to the republics while diverting state revenues to creditors, which of course led to the fracture of the Yugoslav Federation." ... (and therefore was a major contributor to the civil war that followed.)

In Russia the level of spending or real income collapsed by 86% in one year.

In Rwanda an IMF organised devaluation or 50% disrupted a self-sufficient grain economy. The World Bank enforced open door policy to grain imports and foreign suppliers began dumping grain on the market, which destroyed the fabric of the local economy. "...the Rwandan peasantry was totally destroyed..."

The banks contribute to the attack on national economies in a number of ways, and benefit from each. For instance the speculators who begin a raid on a national currency borrow the funds for this from the banks. When the country ends up with huge debts it borrows the money for repayments...from the banks. When rich countries assist heavily indebted poor countries, it is again the banks who lend the money...and earn interest on all these deals. The banks "...are also the underwriters of public debt in the western countries which are financing these multibillion dollar bail-out operations.

"...the financiers have now gone on a shopping spree buying up high tech companies ...General Electric purchased...the largest aircraft engine production facility in the former Soviet union...for a mere $300,000...The US has bought up the Russian space program for probably a few million dollars. The assets are bought up at rock bottom prices."

"...we are dealing with an economic program which ultimately destroys the fabric of civil society. "...the 'Washington consensus" (i.e., this savage neo-liberal strategy) is shared by politicians from one end of the spectrum to the other..."

The magnitude and power of the speculative operations is indicated by the fact that the amount "spent" on financial speculation in Canada is more than 32 times the amount paid in wages and salaries

M. Chossudovsky, "The curse of economic globalisation", Monetary Reform, Fall/Winter, 1998/1999, pp. 13-20.

McMurtry says globaliation is destroying "...the world's civil fabrics" . He refers to "...a furiously acquisitive mind-set".

J. McMurtry, "At the edge of a new dark age", Committee on Monetary and Economic Reform,, 12, 1, Jan, 2000.

"Two decades of so-called neo-liberal structural adjustment have left behind economic failure and social disaster."

"There are more poor, unemployed and hungry people in Latin America now than at any other hard time in its history."

"Trade liberalisation has essentially consisted in the unilateral removal of protection instruments by the south. Meanwhile , the developed nations have failed to do the same to allow the Third World exports to enter their markets.

The rich nations have pushed for freedom of trade in sectors where they have enormous advantages, such as information technology. "On the other hand, agriculture textiles...have not even been able to remove the restrictions agreed upon...because they are not of interest to developed countries."

"The world economic order works for 20% of the population but it leaves out, demeans and degrades the remaining 80%"

Fidel Castro, Speech to the South Summit, 2000, Third World Resurgence, 117. 2000, p. 27.

How liberalisation of the economy means loss of control over one's own national assets.

In 1989 the rime Minister signed away Canadian control over its energy resources, as part of the free trade arrangements.

"A1985 US congressional report called Can ada's regulatory control over its natural gas as a 'direct restriction of American rights to Canadian gas" and called for the American governent to make gunaranteed accss to Canadian supplies a point of national security."

Canadian Prime Minister Mulrooney called the practice of maintaining emergency reserves "odious"

"The Mulrooney government deregulated oil and gas exports And dismantled most restrictions on American foreign investment in the energy industry, one again opening up Canada's resources to domination by an ever-smaller, ever-more powerful group of transnational corporations with no interest in Canada.""...and promised American business full access to Canada's energy supplies."

The provision that Canada should maintain a 25 year surplus ofr natural gas was abandoned.

Applicants for export licences were no longer required to file an impact assessment.

Export taxes on energy were banned, meaning that the government lost an important source of tax revenue.

Most important the trade agreements imposed the requirement that Canadian energy supplies to the United States are guaranteed in perpetuity. In an astonishing surrendered of sovereignty, the government of Canada agreed that it no longer has the right to refuse to issue a licence or revoke or change a licence for the exportation to the United States of energy goods..."

Maude Barlow, "Good news for us (too bad for Canada...) 26th Sept, 2000.

For the mass of humankind outside the core areas of the world economy, the overall pattern has been one of retrogression; declining living standards, dramatic increase in social inequality, pauperisation of large sections of the population. We are dealing, in short with systemic problems that plague global capitalism as a whole..."

D. McNally, "The present as history; Thoughts on capitalism at the millennium", Monthly Review, July-Aug., 1999, 136-137.

"It is the elites who are in favour of global free trade. It is they who will be enriched." James Goldsmith quoted in,

M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

"All the evidence is that free trade brings not progress, but decline to the poorer nations." (175)

"The lesson is, if you want to develop your nation, don't embrace free trade. Protect your domestic economy..." (176)

M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

Governments compete against each other to set lower standards,

more favourable to corporations, in order to entice them to invest.

National governments—both North and South—are engaged in the same "race to the bottom". In the UK, it is national economic policy to offer the country as a low wage, deregulated "enterprise zone" with relatively pliant workforces. In a brochure aimed at attracting foreign investment, the government's Invest in Britain Bureau (IBB) highlights Britain's "pro-business environment" and its "liberal and undemanding labour regulations".

In addition, the IBB advertises "labour costs significantly below other European countries", a "commitment to reduce the burdens on business", "no exchange on repatriated profits". The brochure continues: "The UK has the least onerous labour regulations in Europe, with few restrictions on working hours, overtime and holidays . . . There is no legal requirement to recognize a trade union. Many industries operate shift work, and 24-hour, seven days-a-week production for both men and women."

The IBB assures potential investors that "no new laws or regulations may be introduced without ascertaining and minimizing the costs to business." The UK government is also committed to cutting back regulations that it deems to restrict enterprise. Since 1993, 605 regulations have been identified for the axe; these include measures covering health and safety, biotechnology, advertising in sensitive areas, hedgerow preservation, food standards and energy efficiency. This world of work has long been familiar to workers in the South, where governments (under the tutelage of the IMF) have been deregulating industry and setting up "free trade zones" since the early 1970s in an attempt to provide "a favourable climate" for private sector investment. The rights of workers to organize and strike have been restricted; environmental regulations weakened; foreign ownership restrictions watered down or abolished; and TNCs granted freedom from planning and environmental controls and permission to repatriate profits without restriction.

N, Hildyard, C. Hines, and T. Lang, “Who competes?", The Ecologist, 26, July/Aug., 1999, 132.

“… a new class structure has emerged in advanced market economies. The social groups constituting the new privileged minority are basically, hostile to any expansion of statism and the welfare state and are increasingly attracted by the ideology of the private provision of services like health, education and pensions—although a significant part of this attraction is forced by the neo-liberal undermining of the state provision of these services. Their attitude towards statism and the welfare state is determined by the fact that public services and their financing by taxation have a disparate effect on the privileged minority and the underclass. In other words, it is the privileged minority that has to finance, through taxation, public services in which they are not interested anymore (because of the deterioration in their quality as a result of neo-liberal policies). As the privileged minority is also the electoral majority (because they take an active part in the electoral process, whereas the underclass do not bother to vote”…

“So in the last 15 years or so, all major social-democratic parties, (Britain, Gerrnany, France, Sweden, Spain, Greece) have abandoned traditional social-democratic policies like the commitment to full employment and the welfare state, and adopted, with minor variations, the essence of the neoliberal programme (privatisations, liberation of markets …

A neoliberal consensus has swept over the advanced capitalist world and has replaced the democratic consensus of the early post-war period. ..

“The main economic policies proposed by neoliberals and subsequently implemented first by the Thatcher/Reagan administrations and later by governments all over the world have been the liberalisation of markets (particularly the labour market), the privatisation of state enterprises, the redistribution of taxes in favour of high income groups and, last but not least, the reduction of the welfare state into a safety net and the parallel encouragement of the private sector 's expansion into social services (health, education, pension schemes and so on). The effect of the latter has been not only the marketisation of sectors of the economy that used to be under state control, but also a further reduction of the social wage'—a fact, which makes labour even more 'flexible' to market conditions. No wonder that as a result of these policies, profitabilitv, which had slumped at the end of the statist period, has been almost restored to the levels achieved at the peak of the post-war boom.

With hindsight, it is therefore obvious that Polanyi was right in thinking that the rise of statism in the 1930s was evidence of the utopian character of the self-regulating market and of the existence of an 'underlying social process' which leads societies to take control of their market economies. In fact, statism proved to be a relatively brief interlude in the marketisation process. In this

T. Fotopoulos, “Welfare state or economic democracy”, Democracy and Nature, 5. 3. 1999, 433-468.

Extracts from an interview with Michael Chossudovsky,

Professor of Economics, University of Ottawa.

(For full text see http://www.tenc.net)

When an IMF mission goes into a country and requires the

destruction of social and economic institutions as a condition for lending

money - this is very similar to the physical destruction caused by NATO

bombing. The IMF will order the closing down of hospitals, schools and

factories. That's of course more cost effective than bombing those

hospitals, schools and factories, as they did in Yugoslavia, but the

ultimate result is very similar: the destruction of the country.

Some think the IMF and World Bank are playing contradictory roles, which is not so. And also there's a tendency to see these institutions in isolation. In fact they are simply

two tools used by the Western elite to destroy nations, to turn them into

territories.

… The simple fact is: Wall Street is behind both these institutions. They are run by bankers not sociologists…

The countries that accept the IMF, like Bulgaria and Romania, they may not get bombed but they are destroyed with the pen. InBulgaria the IMF implemented the most drastic reforms, IMF medicine, which

decimated social conditions - pensions slashed, factories closed, dumping

of cheap finished goods, elimination of free medical care and

transportation services and so on…

Sometimes war creates the conditions, and then the economic institutions

come in and pick up the pieces. Or conversely the IMF itself does the

destabilizing, as they did in Indonesia. They insisted on cutting off

transfer payments to the various states in the federation. Now that

fractures a country like Indonesia which has 2,000 islands with a system

of local governments. It is the geography of the bloody place. So they

leave these islands to their own devices.

Do you see what that accomplishes?

Israel (Interviewer): In other words, they insisted on cutting money that was suppose to

subsidize the local governments?

Chossudovsky: Yes, for example for education and so on. By doing this -

and incidentally they did it in Brazil as well - they destabilize the

country because in order to have a country there must be fiscal coherence,

a system of fiscal transfers. So in a place like Indonesia, each of these

islands becomes a small state. And of course now the idea of going it

alone becomes far more attractive to the many different ethnic groups. Of

course they [that is, the planners] are fully aware of this - they have

made it happen time and again. It took place in Yugoslavia; it took place

in Brazil; it took place in the former Soviet Union where the regions are

left to their own devices because Moscow doesn't transfer any money.

Potentially it could happen in the United States as well. It is guaranteed

to produce a situation of conflict, internal strife.

Israel: Mutually unproductive conflict?

Chossudovsky: Yes because people are impoverished to such an extent that

they start fighting.

Israel: On every basis, especially ethnic.

Chossudovsky: Incidentally in Somalia there weren't any ethnic groups, but

it worked there too. You don't need a multi-ethnic society to have

divisions, to have Balkanization.

Israel: And you're saying this is part and parcel of a plan for Empire?

Chossudovsky: I am saying this is recolonization. Countries are

transformed into territories, colonies essentially.

Israel: What distinguishes the two?

Chossudovsky: Countries vs. territories

A country has a government. It has institutions. It has a budget. It has

economic borders. It has customs. A territory has only a nominal

government, controlled by the IMF. No schools and hospitals, as those have

been closed down on orders of the World Bank. No borders because the WTO

has ordered free trade. No industry or agriculture because these have been

destabilized as the result of interest rates of 60% per anum and that is

also the IMF program.

Israel: 60% per year?

Chossudovsky: In Brazil it's much higher. I'm looking at Botswana now. The

interest rate is horrendously high.

Israel: And this is imposed by the IMF?

Chossudovsky: They put a ceiling on credit. Do you see? So people can't

get bank loans; it drives interest sky high and that kills the economy.

Then they open it up to free trade. So the local capitalist enterprises

have to borrow at 60% from the local banks and then they have to compete

with commodities from the United States or Europe where interest rates are

6 or 7%. These reforms are essentially aimed at destroying local

capitalism.

===============================================================

Extracts from “The World Bank's practices allow the rich to steal from the poor”.G. Monbiot, The Guardian,Thurs, April 13, 2000.

Of course - the poor only started to demand - and acquire - rights in the

last two or three centuries. The rich stealing from the poor has been a

fairly standard practise - where the process was hindered for a time by

popular empowerment it has came back into fashion as the principal purpose

of "neo-liberalism".

...

As the researcher Mark Lynas has shown, the World Bank's "reforms" are

directly responsible for the deaths of tens of thousands of Zambian

people. Most cannot afford to buy their own medicines, so they die of

easily treatable diseases. Partly as a result, infant mortality in Zambia

has risen by 25% since 1980, while life expectancy has fallen from 54 to

40. The cuts have forced Zambia's Siavonga Hospital to merge its

obstetrics and tuberculosis wards, with predictable results. The

government has also been forced to slash its spending on education, from

40 per primary school pupil in 1991 to 10. Enrolment has fallen from 96%

in the mid-1980s to 77% today.

On Sunday, thousands of people will converge in Washington to protest

against the World Bank's policies. There will be plenty to keep them busy.

For the World Bank is not, as it pretends to be, the saviour of the

world's poor, but their most deadly enemy.

Every one of the bank's policies is beset by contradictions. It claims,

for example, to be the champion of free choice, yet its prescriptions are

resolutely Maoist. It promulgates precisely the same approach to

development everywhere on earth, regardless of circumstance. It rules not

by science but by slogan: the great leap forward will be achieved by means

of "comparative advantage", "privatisation" and "trade liberalisation". It

keeps pursuing its crazy schemes even in the face of repeated failure: the

bank is still funding hydroelectric dams all over the developing world,

for example, despite scores of social and environmental catastrophes.

The World Bank assures us that it is now the champion of female education,

having launched a handful of high profile schemes to provide schooling for

girls. But every year its "structural adjustment" policies force millions

out of school. Like the International Monetary Fund, it uses third world

debt to extract concessions from developing countries, obliging them to

cut their spending and hand the public sector to foreign corporations. As

schooling throughout much of sub-Saharan Africa is now available only to

those who can pay, the girls are dumped.

The bank claims to be fighting corruption. Yet it is one of the most

corrupt and corrupting institutions on earth. It lent Indonesia's

President Suharto a total of $25bn, much of which was stolen. Bank staff

knew this was happening and colluded in the theft, covering up for the

government in order to save face. In Washington the World Bank is enmeshed

in a sticky web of crony contracting, as large US companies lean on their

government to persuade the bank to give them work. Last month, it

demonstrated that it had picked up a few tips from the corrupt regimes

with which it cheerfully does business, by appointing as its chief

economist the brother of one of its vice-presidents.

About once a year, the World Bank admits that it has erred, and promises

that it has learnt from its mistakes. And every year it immediately

repeats them. When the massive migration schemes it funded in Indonesia

and Brazil led, predictably enough, to the displacement and murder of

indigenous people, the bank acknowledged that it should not have provided

the money. Today, however, it is investing in an almost identical scheme

in western China. In 1991, it conceded that its forestry programmes were a

disaster, and claimed to have changed its approach. Two months ago the

bank admitted that the new policy is just as bad as the old one. It's not

hard to see why the World Bank is destined to sow destruction wherever it

goes. The "disciplines" it imposes are not, as it claims, market

disciplines, but political disciplines. It has just one true mandate: to

engineer a neoliberal world order so that first world countries can seize

third world resources.

...

The World Bank has become the means whereby the rich are empowered to

steal the incomes of the poor. It claims to be defending the world from

disasters. In truth its purpose is to promote them.

...

THE WTO AGREEMENT ON AGRICUITURE

Agriculture is still the primary source of livelihood for three quarters of humanity, and is as much a cultural activity as an economic one. The AOA is a rule-based system for trade liberalisation of agriculture that was pushed by the United States and its global agribusiness corporations. Its effect is to impose global competition on the domestic farm sector undermining the viability of small farms that are unable to compete with cheaper imports As a result, it will drive millions of small farmers off the land and ensure that agriculture is controlled by global corporations. In so doing, it will constitute the biggest refugee creation programme in the world.

V. Shiva, The threat to Third World farmers, The Ecologist Report, Sept., 2000.

Corporate mergers and acquisitions grew at a rate of almost 50 percent per year in every year but one between 1992 and 1998. Globally, more than two trillion dollars worth of mergers were announced in the first three quarters of 1999. It is the greatest merger wave in capitalist history.

Increasingly we are faced with a world economy governed by financial speculation and the attempt to create global monopoly (or oligopoly) power…

J. Bellamy Foster, Monopoly Capital and the Turn of the Millennium, Monthly Review, April, 2000, pp. 10-12.

Economic globalisation, as promoted by the World Trade Organisation, is a planned project of exclusion that _siphons the resources and knowledge of the poor of the South into the global marketplace and strips people of their life support systems, livelihoods, and lifestyles. Global trade rules, as enshrined in the WTO's Agreement on Agriculture (AOA) and in the Trade Related Intellectual Property Rights (TRIPs) agreement, are primarily rules of robbery, camouflaged by arithmetic and legalese. In this economic hijack, the corporations gain, and people and nature lose.

V. Shiva, The threat to Third World farmers, The Ecologist Report, Sept., 2000.

Multinational corporations want free trade because they are trying to get Governments off their back so that they can exploit the profits that they can make with the minimum of interference…

T. Bern, “Free us from trade”, Ecologist, 30.6. S ept. 2000.

These agreements, these organizations are set up only to protect and

increase the power and privilege of the wealthy elite. Our wealthy senior politicians are in full collusion. ..the reforms of the 1980s in Mexico were, indeed, great for foreign investors and a very small sector of the Mexican population, the Mexican rich, including many new billionaires, but they were a total disaster for the overwhelming majority of the "intellectual property rights" agreements, which are highly protectionist, have just been built into the recent trade agreements including NAFTA. They impose protectionist rights in favour of corporations of an extreme kind. ..

In the United States, the original idea of NAFTA was to ram it through in secret. That's pretty clear. The NAFTA agreement was signed in August of 1992 right in the middle of the presidential campaign. All eyes were focused on the election. It was barely even reported…

The main opponents of the NAFTA agreement was the labour movement. There happens to be a law in the United States, the Trade Act of 1974, which requires that the labour movement be consulted and that they participate in any trade agreement. Well that was totally violated. They weren't even told about it until September 8~, 1992. The Labour Advisory Committee, the relevant group, was informed on September 8th that they were to submit their reaction to ~NAFTA on September 9th. That is within one day and that's a month after it had been initialled , by the President, almost in secret. The idea was that the Committee wouldn't be able to meet…

Well, interestingly, despite the huge propaganda effort, the public as I mentioned, remained opposed. It was all corporate propaganda, like 100%, with a total silencing of the opposition. About the only person they let in was Ross Perot. He was allowed in, if only because he was a billionaire, but for another thing, because he's kind of a funny-looking guy and he was saying some pretty dumb things, so you could make fun of it. But the serious proposals were cut out, including the ones required, by law, from the labour movement and the Congressional research bureau and, of course, all the grassroots organizations, which goes p' without saying. It was passed despite the 111 enormous public opposition.

N. Chomsky, “Whose world order”, Monetary Reform, 10, 2000.

These big firms now want to break down the barriers so that they can take over the local firms and farms of the developing world and increase their monopoly. I ~ Thus we now see the liberalisation of trade, finance and investment. But in areas where the big companies and their governments would lose from liberalisation, they practise protectionism, for example the imposition of high intellectual property standards throughout the world which is protectionist, in creating monopoly of technology by the big companies and hindering technology transfer. ..

Globalisation is a process that can be called re-colonisation…

There has been the great pressures of the rich countries to get the poorer countries to liberalise their economies, but the North practises protectionism when they insist on patenting their technologies, when they practise bio-piracy, when they do not open their doors to labour coming from the South.

M. Khor, Millennium Forum, UN General Assembly Hall, New York, 22.5.2000. ERA Newsletter, 30.5.2000

"Since liberalisation began in Russia in 1989, inequality has doubled wages fell by almost half, and male , life expectancy has declined by . more than four years to 60 years."

United Nations Development Programme, 1999.

Developing countries in the past have used a combination of subsidies and measures to protect local markets as a development strategy.

The success of Japan, Korea, and other countries was based on

just such practices. The WTO rules, which the core countries

have pushed, prevent such development trajectories. Even

local food self-sufficiency is a target of the WTO. As countries

are forced to open their markets to foreign grains and other basic foods, local farmers are driven offthe land and into cities hardly ready for such an influx. ..

Hertel of Purdue University and Will Martin of the World Bank have shown that rich countries' average tariffs on manufacturing imports from poor countries are four times higher than those on imports from other rich countries. Rather than receiving favoured treatment, the developing countries are treated far more harshly…

…a sustained and far reaching class struggle from above has been engaged in and has successfully weakened labor, diminished trade union

membership, reduced living standards, worsened working

conditions, and strengthened ruling-class control over the state and its allocation of expenditures and collection of tax revenues. ..

Budgets are heavily skewed toward tax reductions for the rich, cuts in health, welfare, and education and sharp increases in expenditures for overseas expansion military intervention, and bailout of overseas speculators. The winners and losers reflect the class nature of the state…

W. K. Tabb, Understanding the Politics of Globalisation, Monthly Review, March, 2000, pp. 10, 1-19, 31.

For what we are doing in the name of globalisation to the poor is brutal and unforgivable. This is specially evident in India as we witness the unfolding disasters of globalisation, especially in food and agriculture.

And the take-over of the edible oil industry has affected 10 million livelihoods. The take over of flour …by packaged branded flour will cost 100 million livelihoods. And these millions are being pushed into new poverty…

The globalisation of the food system is destroying the diversity of food cultures and local food economies…

Recently, because of a W.T.O. ruling, India has been forced to remove restrictions on all imports…

V. Shiva, Reith Lecture, Email Newsletter of ERA, 22.5.2000

If a banker were to lend a million dollars to Al Capone to build the world's largest toothpick factory, and he skipped off with the cash, we'd say that banker was a fool and deserved to swallow his losses. If that same banker lends a million dollars to a Third World dictator, he need never do so, because he knows the IMF will always be there to squeeze the money out of the dictator's former victims. (If millions of children have to go hungry as a result, so be it.)

… globalization means reducing restrictions on those who are already rich

and powerful, and strengthening the walls which imprison the poorest and

most vulnerable. It is plainly immoral. That's why so many thousands of America’s young people having been mobilizing to protest it, and demanding a form of globalization which will actually benefit the vast majority of people with whom we share this earth.

. . . the single most significant form of protectionism in the world today is our gargantuan system of patents and copyrights.

D. Graeber, “What real globalisation would mean”, ERA email network, 18.6.2000

Ultimately then the pressure of globalisation comes to rest on wages. These is pressure to cut the social wage (i.e., welfare spending)_ to get an “internationally competitive” tax regime and to cut wages to “internationally competitive” levels. This is the bottom line for governments and explains much of the policy agenda over the last two decades in Australia and elsewhere…Economic regulation, taxes or higher wages will simply mean that capital will be invested elsewhere.”

G. Ogle, "Putting public ownership back on the agenda”, Green Left, June 5, 1966, p. 3.

“Trade liberalisation and structural adjustment policies are destroying local productive capacity in rural societies, and small farmers livelihoods. They push countries into cash crop export production at the expense of domestic food production. Around a million families lost their livelihoods as maize prices plummeted in Mexico due to cheap, subsidised imports with the implementation of NAFTA in 1994.”

“In June, the WTO Special Session of the Committee on Agriculture heard that liberalisation has “broken the agricultural backbone of many developing countries. A group of l11 Asian, African and Central American countries reported that key agricultural sectors vital for the economy in terms of food supply, employment, economic growth and poverty reduction were being seriously eroded due to the inability to compete with cheap imports.”

A. Choudry, “Force feeding free market fundamentalism vs fighting for the freedom to farm”, The Big Picture, Nov. 2000, p. 10-11.

Globalisation “ …is increasing poverty, inequality and environmental degradation, virtually everywhere.” 199.

C. Hines, Localisation; A Global Manifesto, London, Earthscan, 2000.

Globalisation makes it easier for criminals to launder money.

G. Winslow, Capital crimes; The political economy of crime in America, Monthly Review, Nov., 2000, p. 40.

Globalization is not about trade, as its promoters would like us to believe, it is about power and control. It is an attempt by the largest international banks and multinational corporations to run the world their way, for the right to own benefit and by their own set of rules, rules that would allow them to undo a century of social progress and to alter the distribution of income from inequitable to inhuman. P. vi.

P. Hellyer, The Evil Empire, Toronto,1997.

Driven by a single-minded dedication to generating ever greater profits for the benefit of their investors, global corporations and financial

institutions have turned their economic power into political power. They

now dominate the decision processes of governments and are rewriting the rules of world commerce through international trade and investment

agreements to allow themselves to expand their profits without regard to

the social and environmental consequences borne by the larger society.

Continuing with business as usual will almost certainly lead to economic,

social, and environmental collapse. 6

D. Korten, The Post Corporate World, p. 6.

David Korten describes TNCs as 'instruments of a market tyranny that is extending its reach across the planet like a cancer, colonising ever more of the planet's living spaces, destroying livelihoods, displacing people, rendering democratic institutions impotent, and feeding on life in an insatiable quest for money. The worst aspect of this tyranny is that it hits hardest at the most vulnerable people, the poor…

D. Korten, The Post Corporate World, p. 6.

Furthemore, the effect of the liberalization of markets in the USA has

been the drastic worsening of the distribution of income. The real wages

of two-thirds of American workers have dropped considerably (weekly

wages fell by 18 per cent between 1973 and 1990), causing a significant

widening of inequality.' Thus, although average household income

climbed 10 per cent between 1979 and 1994,97 per cent of the gain wentto the richest 20 per cent. The USA trends are sure to be reproduced soon all over the North, particularly after the collapse of the altemative 'Rhineland' model of 'social market' capitalism. 101

T. Fotopoulos, Towards an Inclusive Democracy, 1996.

Thus, according to the ILO, in the early 1990s, 120 million people were unemployed and 700 million people were underernployed living below subsistence level. In other words, about 30 per cent of the world's population which is capable of working do not have enough work for subsistence, a crisis correctly described as worse than in the

1930s. Furthermore, according to the latest UN Human Development Report (1996), the total wealth of the world's 358 billionaires equals the combined income of 2,300,000,000 people, the poorest 45 per cent of the world population. '..

D. Korten, The Post Corporate World, p. 142.

The freedom of such capital to move internationally offers unparalleled opportunities for profit. The growth of the gap between the rich and poor will continue" (ibid.` 225)

Basically, what free trade means is that the capitalist or independent class can ask the laboring or dependent class to reduce its standard of living to Third-World levels, while the capitalists grow more wealthy from the abundance of opportunity afforded by a low-wage global economy.

This is where our addiction to exponential growth is taking us. As long as capitalists are free to invest where they will, without regard to national and community concerns, such as balanced trade, decent wages, and job security, we will continue to continue to become an increasingly fractured society. This is the road to crisis of one sort or another.

R. Terry, Economic Insanity, p. 165.

Who Benefits from the Free Trade Agreements?

All our political leaders, our business organizations, and most of our

university academics proclaim that the free trade agreements benefit Canada,

the United States and Mexico, and the proposed Free Trade Area of the

Americas (FTAA) will benefit the less developed countries in Latin America.

I spent the month of March touring Mexico, looking for information on the

impact of the new free market free trade regime on Mexican development.

In Canada this new political economy system is called globalization; in Latin

America it is called neoliberalism. First, it should be remembered that these agreements have very little to do with trade. Even before they were signed we had almost complete free trade. The new agreements are primarily about private investment rights.

How does one judge whether a political economy regime is a success?

Mainstream economists usually cite figures on economic growth. In Mexico the

period 1945 to 1974 was the period of state-led Keynesian political economy.

During that period real annual growth averaged 6.4% and inflation 3.1%.

Manufacturing grew at a rate of 7.6%, and many jobs were created. This

period was called "the economic miracle." Between 1973 and 1983 real

economic growth averaged 4.8%, and inflation rose to 16.5%.

In the period of neoliberalism, from 1982 to the present, the real rate

of growth has averaged 2.8%.The average annual inflation was 45.7%. These

basic figures alone explain why there is such skepticism of neoliberal

policies in Mexico.

Mexico has always been characterized by inequality, but this has risen

under the neoliberal regime. The World Bank reported in March that the

bottom 10% of the population earned only 1.5% of total income whereas the

top 10% earned 42.8%. The distribution of wealth, which would be very hard

to measure, is believed to be much worse.

The poverty line set by the Mexican government is two daily minimum

wages for a family of five. Today this is 80 pesos or around $13 Canadian.

The World Bank argues that since the inauguration of NAFTA (1994-2000) the

number of working people living below the poverty line has risen to 36

million persons or 62% of the economically active population. Over this

period the real minimum wage has fallen by 40.7%.

In the latter part of March the Mexican government sponsored a national

symposium on poverty. Julio Bolvitnik, an economist from El Colegio de

Mexico, argued that 71 million people or 73% of the population live in

poverty and 45 million in extreme poverty. James Foster, an economist from

Vanderbilt University who works for the World Bank, argued that economic

growth does not solve poverty and that rising poverty and inequality were a

"time bomb" in Mexico.

Labour's position in the economy has steadily declined during the

period of neoliberalism. Mexican government figures (INEGI) report that

between 1993 and 2000 the gap in wages in manufacturing between Mexico and

the United States rose from $9.6 to $12.1 per hour. The Organization for

Economic Co-operation and Development (OECD) reports that since 1995 real

wages in Mexico have declined by 10%. But over this period labour

productivity increased by 45%. This is due almost exclusively to the fact

that many workers have increased their hours of work from eight to twelve

hours per day. The number of Mexicans working more than 48 hours per week

rose from 2.3 million in 1988 to 9.3 million in 2000.

A study by economists at the National University in Mexico City shows

that over the last three years labour's share of the Gross Domestic Product

has declined from 34.16% to 30.66%. In 2000 13.3 million workers earned less

than the minimum wage (40 pesos per day, or $6.55 Canadian), which is

roughly one-third of all workers. UNICEF reports that there are five million

children under 14 working in Mexico. The Constitution prohibits children

under 14 from working.

In 1980 the average automotive worker in Mexico earned about one-third

of the wage of an American automotive worker. By the year 2000 this average

worker earned only one-twelfth of his American counterpart.

The Bank for International Development, Latin America reported in March

that employment in the formal sector of the economy (jobs which pay a wage

or a salary) are in decline in Mexico and throughout Latin America. The

percentage of people working self-employed in the informal economy, with

very long hours, usually seven days a week, low income, and no social

security benefits, is rising steadily. In Mexico this was 40% of the

economically active population in 1990 and is now over 50%.

Mexico has no unemployment insurance and no social assistance. Medicare

does not exist. Only those who work for the government or a private company

which is registered with the national system (IMSS) have any pension, about

one-third of the economically active population. The ability to provide

social programs has been limited by the structural adjustment programs

imposed on Mexico by the World Bank and the International Monetary Fund and

supported by the Mexican political and economic elite. Today total

government expenditures are only 19% of Gross Domestic Product. That

compares to an average of 40% in the industrialized countries of the OECD.

Neoliberalism and NAFTA have been good for the rich in Mexico and the

large corporations. The banks, privately owned and robbed by the Mexican

rich, have been bailed out of bankruptcy twice by taxpayers. The illicit

drug industry flourishes and is now more important than the oil industry,

and free trade and cross-border trucking have made marketing much easier.

Mexicans know that their country is falling behind the United States

and Canada in every area. Aside from incomes, spending is very low on

education, health, agriculture and rural development, and research. It is

not surprising to find that most people, including academics, do not believe

that so-called "free trade” has been good for their country.

John W. Warnock is a Regina political economist and author of The Other

Mexico: The North American Triangle Completed.

John W. Warnock., 2156 Retallack St.,Regina, Canada. SK S4T 2K4 (306) 352-5282

Published by Economic Reform Australia, ERA EMAIL NETWORK, Sun, 15 Apr 2001

The number of people living in poverty has risen from 1.1 billion in 1985 to 1.2 billion in 1998, and will be 1.3 billion in 2000.

W Bello, From Melbourne to Prague; The struggle for a deglobalised world, Economic Reform Newsletter, 12, 15, Dec., 2000,p. 8.

Brenner refers to “…the countries which euphemistically are called developing. In almost all these countries a modest rise in productivity was accompanied by a deterioration in the living standards of the majority of the population and an increase in affluence of a minority.”

Y. S. Brenner, The Rise and Fall of Capitalism, Aldershot, Elgar, 1991. PO. 4.

“Eighty nine countries were economically worse off in 1995 than they had been ten years earlier...1.6 billion people ...are worse off than they were fifteen years ago. In seventy developing countries today’s levels of income are less than those reached in the 1960s or 1970s...In 19 countries ...per capita income today is less than the level of 1960...” (Human Development Report, United Nations, 1996, quoted in Schwarz and Schwarz, 1998, p. 155.)

In 1992 the World Bank estimated that poverty had increased in most developing countries.

B. Schneider, The Scandal and the Shame, New Delhi, Vikas, 1995.

Trade liberalization has already exposed developing country farmers to

ruinous competition, driving down prices, undermining rural wages and

exacerbating unemployment. In the Philippines, opening up of corn

market in 1997 reduced corn prices by one-third. At that time, US corn

growers were receiving US $ 20,000 a year on average in subsidies,

while Filipino farmers in Mindanao had average income levels of US $

365. Between 1993-2000, cheap corn imports from US into Mexico

increased eighteen times, leading to accelerated migration from rural

areas to urban centre

Devinder Sharma, “WTO and Agriculture, THE GREAT TRADE ROBBERY”,([India's national co-ordinator for ISPO, the International

Simultaneous Policy Organization.)