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John M. Bunzl
Founder and Director
International Simultaneous Policy Organisation (ISPO)
SP Campaign Website: www.simpol.org
for Discussion Roundtables 3, 7, 8, 19, 22, 24, 28, 30, 31, 32, 40 and 46
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John Bunzl – Founder and Director
International Simultaneous Policy Organisation (ISPO)
© 2001. John M. Bunzl.
SP Campaign Website: www.simpol.org E-Mail: firstname.lastname@example.org
So responded an angry Tony Blair to suggestions that summits like the G-8 meeting in Genoa should not take place in view of the violence and bloodshed. Blair, defiant as ever, insists that the protesters are preventing democratically elected world leaders from carrying out their day-to-day business of making the world a better and safer place. He vehemently denies that he and other political leaders are out of touch and insists the protesters are seeking to turn democracy on its head. But such statements only serve to underline the extent to which Blair has already lost touch with reality. For he assumes that genuine ‘democracy’ still exists; an assumption which could cost us all dearly in the months and years to come unless politicians take appropriate action very soon. Indeed, quite unbeknown to Mr. Blair – though not to many who shun the ballot box in droves - democracy has already been turned on its head and can no longer be said to exist by any reasonable definition of the word.
Now he and other politicians - and perhaps many readers – will at first scoff at such a statement. After all, we have elections, don’t we? Indeed we do. And they’re free and fair, aren’t they? Indeed they are. But does that necessarily mean we have ‘democracy’? For democracy surely implies not just the mechanics of free and fair elections but the ability of different political parties to choose and, if elected, to implement their freely chosen manifestos. On the face of it, this may appear to be the case. But we need to probe a little deeper to uncover some of the reasons for the protests in Genoa, Gothenburg, Davos and at almost every other major summit meeting since Seattle in December 1999. And this disaffection is just the festering tip of a very large iceberg. For underlying these high-profile protests lies a widespread and deepening public disengagement from party politics as evidenced by ever-lower voter turnouts in elections around the world. This is something our Tony should know well, having himself been recently re-elected by only 42% of the vote with a turn-out of just 58%; the lowest since 1929. To my reckoning, that means only 25% of those eligible voted for him. So why all the disaffection when the mechanics of democracy seem to be in good working order?
The ‘Hidden-Hand’ of Global Competition
The answer, quite simply, is because today’s competitive global economy subtly yet effectively reduces the span of feasible policy options open to national governments. Today we live in a global and largely borderless economy where capital and transnational corporations freely move wherever profits are highest, costs lowest and where governments live in fear of the ‘reaction’ of global markets. No government can now impose higher taxes or regulations on corporations for fear of them moving employment elsewhere. Similarly, governments seeking to impose protective environmental or labour legislation would be seen by global financial markets as ‘uncompetitive’, prompting instant punishment through devaluation, capital flight, inflation and unemployment. Even the mooting of such policies would cause the computers of market traders to instantly move capital to some other economy offering an environment ‘more conducive to business needs’. Democracy presupposes that political parties can freely represent a wide diversity of public opinion and consequently a wide range of feasible policies covering the entire political spectrum. But globally competitive markets now represent a sinister ‘hidden hand’ which narrows the policy parameters to what has now become a highly restricted, business-friendly stance which excludes all those restorative policies traditionally espoused by the political Left to balance social and environmental concerns against those of business.
So at a time when the gap between rich and poor is at its greatest, when job security is at its weakest and when the Left around the world should consequently be at the peak of its effectiveness, it instead finds itself struggling for oxygen as global markets have created a political-economic environment in which traditional centre-left policies have become impractical. And for any political party, impractical policies inevitably spell political redundancy and a loss of public support. For voters are not stupid. They certainly know that their nation cannot ignore world markets or the wider international economic environment. They know that their jobs depend to an increasing degree on their nation’s competitiveness in world markets. Consequently, they are encouraged to align their votes with whichever party they perceive as most likely to maintain it. In the struggle against redundancy, therefore, the Left had little option but to shed those traditional policies of social equity and environmental protection; the policies that once defined its socialist and potentially green identity. Parties such as Old Labour or its counterparts in other countries have thus been forced to re-position themselves under the cover of ‘Third Way’ or other appropriate spin more towards the right: just where the competitive dictates of global markets determine that they or any other party seeking power must be.
The Lights go Down
It is as if democracy could be portrayed as a theatre stage with politicians and their parties as the actors spread across the stage from left to right. In genuine democratic conditions, the spotlights would light the entire stage giving the audience (i.e. the electorate) a clear and illuminated view or choice across the entire political spectrum. The hidden hand of fierce competition between nation states engendered by globally mobile capital and corporations has however interfered with the lighting system such that only the right half of the stage remains illuminated leaving the left in total darkness and its actors invisible. Both the actors finding themselves shrouded in darkness and the electorate seeing a restricted stage thus unwittingly and automatically shift their stance or gaze towards the illuminated area of the stage on the right. Whilst the shift of traditional left-of-centre parties towards the right is usually seen merely as a function of party-political expediency, we should be aware of the underlying anti-democratic forces at work. As such, those voters to the left of centre are today effectively deprived of political expression and of their democratic rights. So is it any wonder they take to the streets in protest? And with global problems worsening, is it any wonder that increasing numbers all over the world now see our politicians not just as ‘out of touch’, but out of their tiny minds as they continue to play out this charade while trumpeting it as "democracy"?
Paradoxically, however, it’s not just the traditional centre-left that finds itself touched by the ‘hidden hand’. As global competition has pushed the parties of the Left gradually to the right, they inevitably adopted most of the economic policies traditionally pursued by centre-right parties. As a result, parties such as the UK Conservatives equally have a problem: the problem of finding themselves displaced and politically redundant as a consequence of the neo-liberal policies their predecessors previously implemented. As former UK Prime Minister John Major once put it: "I went swimming leaving my clothes on the bank and when I came back Tony Blair was wearing them." For underlying the UK Conservative’s tussle over the Euro lies an unspeakable and devastating truth which pertains to virtually all the world’s centre-right parties: that the main planks of their traditional policy programmes have been quietly appropriated from under their noses by the world’s "New Labours". The quasi-dictatorship of transnational capital and international competition, like the hidden hand in a puppet, has at once emasculated the Conservative Party and now moves deeply within Tony Blair who, like a sick parody of Mrs. Thatcher, now touts much the same business-friendly policies merely ‘spun’ in different clothing. So this, it seems, is Mr. Blair’s upside down definition of "democracy".
Out with a Bang: Pseudo-Democracy Replaces Democracy
Indeed democracy could now better be described as ‘pseudo-democracy’: an illusion of democracy in which whatever party we elect, the policies delivered inevitably conform to market and corporate demands at the expense of society and the environment. Under such circumstances, it simply no longer matters much which party we vote for or whether we bother to vote at all. As records for low voter turnouts in elections around the world are broken with increasing frequency, it is evident that politicians who took it upon themselves to de-regulate capital flows have only themselves to blame. Yet instead they bemoan the public’s "lack of political engagement" in so-called "democratic processes" when it is they themselves who have hollowed out democracy by unwittingly giving power over to the quasi-dictatorship of transnational capital and international competition. Indeed, genuine democracy went out with a bang back in the 1980s: the much-vaunted "Big Bang" of Reagan-Thatcher financial market de-regulation.
Putting Democracy Back on its Feet
So with Democracy now already standing firmly on its head and politicians having unwittingly become the pseudo-democratic puppets of transnational capital, Blair and other political leaders would do well to listen carefully to what the protesters are saying. If politicians want the protests to stop and wish to lead us once again according to genuine democratic principles, they must co-operate with one another to expose and disarm the ‘hidden hand’ of transnational capital and corporations and the intense international economic competition which prevents them from solving mounting global problems. They must co-operate to re-impose capital controls and higher taxes and environmental standards on corporations. They must co-operate to use the revenues raised to fund development and higher social and environmental standards in the Third World on a debt-free basis. They must cancel Third-World debt. They must co-operate to impose the necessary restraints on their industries to reduce emissions. They must co-operate to ensure mutual security for all the world’s nations and so remove the massive waste of the bulk of military spending. They must use the savings to help the Third World out of poverty and to arrest rampant population growth, the spread of Aids and other deadly diseases. And in doing so, they will assuredly put democracy back on its feet. But in a globally competitive world, how are our leaders to achieve such goals? How can they fulfil their proper roles to lead the world from destructive competition to fruitful co-operation in which the good of each nation is contained in the good of all? What basis for co-operation could be found which provides the necessary means of delivering those objectives?
Radically innovative yet practical ideas are now surfacing which show how politicians, the growing body of civil society activists, and disaffected voters can begin to find answers to these questions. And the protesters, too, are in need of coherent answers. For applying pressure through protest alone is likely to prove futile unless politicians can be offered a clear and practical way of releasing themselves from the tyranny of the hidden hand of global competition. One such proposal is expressed in the initials 'SP' -- the Simultaneous Policy -- a new and achievable way of removing the barriers of fear and destructive competition which today prevent us all from finding solutions.
Copies of "Reform the WTO! – But Where are the Ideas?" are available from ISPO at the above address. A full explanation of the Simultaneous Policy (SP) campaign is set out in "The Simultaneous Policy – An Insider’s Guide to Saving Humanity and the Planet" by John Bunzl. Copies available from the above address.
The ‘Battle of Seattle’, the disaster that befell the ‘Millennium Round’ of further trade liberalisation attempted by the WTO in December 1999, was widely held by anti-globalisation NGOs and other civil society groups as a major victory. But having successfully forced their way on to the world stage with massive demonstrations and slogans calling for reform of the WTO and an end to corporate globalisation, the enormous assortment of Green and other organisations now suddenly find themselves struck dumb when faced with the inevitable and legitimate question of what specific proposals they have for reform. Indeed, a cursory examination of almost any recent internal agenda of these organisations reveals their frantic search for a new ‘big idea’ or other coherent response to the seemingly unstoppable – and its proponents would say ‘inevitable’ – onslaught of free-trade and globalisation. A recent interview of Lori Wallach, the activist widely reputed to be behind the Seattle protests, demonstrates the problem: "If given a free hand to reform world trade," she was asked no less than three times by the interviewer, "what reforms would you specifically propose?" The answers, beyond generalities, were difficult to find. Furthermore, answers NGOs and activist groups do put forward are undermined by the charge that they are un-elected bodies and their views therefore have little democratic legitimacy whereas, whatever view one may have of the WTO, it is at least the off-spring of democratically elected governments.
The scant and vague proposals that can be discerned seem to call either for a ‘de-powering’ of the WTO, or for it to build in labour and environmental standards into its decisions. Alternatively, it is proposed that labour and environmental issues be dealt with by other supra-national bodies such as the ILO (International Labour Organisation) or some yet to be invented "World Environment Organisation". But would such proposals be likely to lead to an improvement in environmental and labour standards?
On the face of it, they would. But despite the apparently united front of the protesters and their claim to represent the interests of down-trodden developing countries, many such countries see tighter environmental and labour restrictions as running counter to their interests. Their fear is that such restrictions would act as an effective barrier to their exports. (And it is just such barriers that US trade unions who supported the Seattle protests would welcome in order to protect US jobs.) "Such relatively high standards are alright for rich countries," many developing countries say, "but we can’t afford those luxuries, much as we sympathise with their intent." Indeed, some delegates from poor, southern developing countries did not appreciate being lectured at by white, middle-class, American protesters.
What all this seems to point to is what should be perfectly obvious: that we live in a world of nations at vastly differing stages of economic development and, therefore, with widely varying priorities in terms of how labour and environmental considerations should impact on their economies. To expect Guatemala, for example, to have the same environmental and labour standards as Germany would be wholly unrealistic. So to expect any organisation to develop, adjudicate upon and enforce rules that are fair to most, let alone all nations is surely little short of ridiculous. Furthermore, ‘trade’ is the exchange of the end products of often complex production stages taking place in different parts of the world and carried out under widely varying labour and environmental conditions. To seek to equate a spoon produced under responsible environmental and labour conditions in one factory with one produced under sweat-shop conditions in another, and to call such trade ‘free’ as the WTO does, points up the hollow neo-liberal assertion that ‘free’ trade is necessarily ‘fair’. In this context, ‘de-powering’ the WTO or vesting the interests of labour and the environment in other supra-national bodies, who would then compete with one another for the supremacy of their particular standpoint, seems calculated only to result in yet more confusion and is therefore hardly likely to lead to greater fairness.
In considering what reforms might be appropriate, NGOs need to look rather deeper than just the WTO. For they need also to recognise that the motor of today’s neo-liberal global economy is competition. The ability of capital and corporations to move, or merely threaten to move, elsewhere now means that nation states and politicians are no longer in control of the global economy but are themselves subject to its competitive forces and must themselves compete for capital and jobs. For today, their ability to implement any policy that might incur the displeasure of world currency or bond markets in the face of the threat of capital and jobs moving elsewhere has all the robustness and resistance of a chocolate fireguard. Similarly, tighter national laws to promote environmental or labour protection have become but hollow platitudes when markets and corporations can switch investment and jobs to any country offering more attractive, less restrictive (i.e. less costly) conditions. Little wonder that implementation of even the current, very mild, Kyoto climate change agreement stands in jeopardy. Indeed, it can now truly be said that the unfettered free movement of capital has engendered a world market in government policies: an international competition which causes the will of the people to become subordinate to the will of the markets. Even more frightening, however, is the fact that governments are powerless to re-regulate capital markets and corporations because, if attempted, such action would result in capital and corporate flight. Even the G-7 acting together would be powerless for fear of capital fleeing to Singapore, Zurich or the Cayman Islands. So it can truly be said that the free market represents the global institutionalisation of unrestrained competition: competition that is now beyond the control of any single nation nor of any group of nations. It should also be clear that global free-market competition, such as we have it today, is not a basis upon which fairness, environmental or labour protection can result. Indeed, competition is not about fairness – it’s about winning.
In the light of this lack of control on the part of national governments, it is perhaps inaccurate to see the WTO as the cause of our global ills. After all, financial market deregulation and the ability of transnational corporations to move production across national borders are both phenomena which clearly pre-date the establishment of the WTO. But having unwittingly lost control over the global economy, and having then found themselves abandoned to its competitive forces, the only response national governments could make was to ensure that competition be allowed to exert its power more rigorously and ‘fairly’ by setting up the WTO for the purpose. The WTO should, therefore, more properly be regarded as a symptom of the absence of control over the global economy rather than its cause.
Only if the WTO were, at the behest of all its member governments, to perform a complete about-face and, instead of underpinning the free movement of capital and corporations, were to re-regulate them, could one expect any real improvement. Given that such a prospect appears unlikely, simply ‘de-powering’ the WTO or hiving off national responsibilities to other such bodies will neither change nor stop the forces of global free-market competition. NGOs are absolutely right to insist that free-market competition represents an unacceptable paradigm but what, one might well ask, is the alternative?
At this juncture, free-marketeers will, with some justification, intone that an abandonment of global laissez-faire (were that still to be possible) would be synonymous with a return to protectionism: a tit-for-tat international competition of rising import tariffs often cited as one of the causes of past wars. If that argument is accepted, it seems that neither global laissez-faire on the one hand, nor protectionism on the other, can offer an image of a global economic framework likely to encourage fairness in trade between nations whilst protecting the environment and providing for appropriate labour conditions.
Here, then, lies the rather knotty problem faced by NGOs today. Since both protectionism and free-trade are characterised by unsustainable levels of competition, it seems that quite a different vision for a future world economy is needed. And that is to say nothing of the effects of global warming which by way of unprecedented extreme weather conditions is already signaling an unmistakable and urgent need for a new, world economic order.
In searching for that new vision, it might perhaps be worth noting that if uncontrollable competition is the unavoidable by-product of both the hitherto available paradigms, surely some study of competition itself might not be such a bad starting point. In the current free-market environment competition is taken for granted as being necessarily a good thing. We are all exhorted to be ‘more competitive’, for today any activity, business or product whose cost is higher than its competitors is immediately branded ‘uncompetitive’ and its right to existence immediately denied. Furthermore, competition is almost universally hailed as the ‘engine of innovation’ and lower prices for consumers. But if that were the case, the global economic competition we have today would represent nothing less than utopia which, with the possible exception of the top 20% of the world’s population, it most certainly does not. Global warming and environmental degradation, growing numbers of refugees and asylum-seekers, an increasing gulf between rich and poor and an increasing recourse to far-right political parties are all compelling evidence not of utopia, but of a quick-sand of competition in which we are all caught and which is sucking us into a deepening global sickness.
In considering competition in more depth, it quickly becomes clear that, to be fair and rewarding, it must always occur within the framework of a fair and universally accepted and respected set of rules. Be it a competitive children’s game, an Olympic athletics race or trade in the global economy, competition must always be held subordinate to co-operation. If it is not, as any parent knows, even a children’s game can quickly get out of hand and turn into a small war. Because no nation state, nor group of states, is now able to re-regulate global capital flows or transnational corporations, and the WTO only serves to underpin their free movement, I suggest that competition can indeed be said to have escaped from its controlling cooperative framework and is now running rampant and quite out of control. Little wonder that free-marketeers hail globalisation as ‘inevitable’.
Faced with this perilous predicament, therefore, the first thing NGOs must do is to recognise and accept these facts and to resist the temptation of sticking their heads in the sand by pretending this potentially catastrophic situation somehow doesn’t exist. One way some critics of the global economy delude themselves is to pretend that nations can still control global capital, citing examples of nations that have re-imposed capital controls such as Malaysia or Chile. But they ignore the fact that those countries only implemented controls when threatened, during the South American and South East Asian financial crises, by imminent capital flight. In other words, imposing capital controls was the lesser of two evils, faced, as they were, with the even more daunting prospect of total capital hemorrhage – what George Soros appropriately refers to as the ‘wrecking ball’. Imposing capital controls therefore remains a highly exceptional possibility and, even then, such crises are likely to threaten only weaker developing economies. All the while there exists somewhere more attractive for capital to fly to, re-imposition of capital controls will always remain a forlorn hope, even for the G-7. Indeed, it is surely examples like Malaysia and Chile that serve only to prove that global capital is now beyond uni- or multi-lateral re-regulation. Only global, or virtually global and simultaneous regulatory action could provide a satisfactory and secure solution.
The same applies to multi-national corporations. Their ability, or mere threat, to move production and jobs elsewhere has too often forced governments to provide them with generous subsidies at taxpayers’ expense. This points up the global ‘free’ market as merely a kind of protectionism on behalf of the multi-nationals who now roam the earth like a herd of cannibalistic bull elephants in search of ever-larger profits, driven on by the relentless demands of shareholders, fund managers and the fear of hostile takeovers. That one out of a herd of hundreds might every so often fall foul of US anti-trust law, as Microsoft has, should be of little comfort when one considers how many others go un-checked. Indeed, Microsoft’s predicament amply demonstrates the hypocrisy the US free market model. After all, the natural result of global free-market competition has been unprecedented corporate consolidation and fierce competition characterised by aggressive marketing techniques. If Microsoft has become too dominant as a result of its executives having fulfilled their duty to ‘act in the best interests of the company’, it is not surprising they are bewildered at now finding themselves penalised for doing what is, after all, only their job. Indeed, the Microsoft case only confirms that all corporations require regulation to bring them back under national, democratic control and accountability. But again, such re-regulation could, logically, only occur globally and simultaneously.
NGOs must firstly, and above all therefore, have the courage to face the facts of this situation: a situation that politicians themselves are no longer in control of. It should secondly be obvious that attempting to apply conventional pressure on politicians to change something over which they have already lost control is likely to prove futile. Indeed, such is our perilous predicament that any new vision for a new world economic order must be much more than just a vision: it must not only make clear what is being asked of politicians, businessmen and others, it must also show them how that vision can be achieved. It must demonstrate a clear and practical method of making a secure and responsible transition from the existing sick paradigm to the future one we all desire. In short, the challenge is how to get from A to B. Indeed, so intractable has our current predicament become, that developing an appropriate method for making that vital transition has become even more important than envisioning the new paradigm itself.
That new paradigm will doubtless be one of global economic cooperation between nations in which a regulatory framework for capital and corporations as well as other aspects of economic activity is upheld by all nations. Such a framework would also be characterised by national and regional economic self-reliance whilst recognising and respecting the richness and diversity of the world’s nations and cultures. It would also entail a mode of economic development for poor nations based not on debt and dependency but on freely donated funds and assistance. Such a framework would therefore encompass both unity and diversity and the knowledge that ‘the good of each nation is contained in the good of all’; a mode of human relations which is, perhaps, more commonly known as ‘community’.
And as to how we reach that goal, to my (uncertain) knowledge, there is only one organisation that has yet developed a methodology capable of doing so.
Copies of "Reform the WTO! – But Where are the Ideas?" are available from ISPO at the above address.
As the founder of a growing NGO promoting a new solution to the problem of corporate globalisation, a few weeks ago I posted an article on the ‘WTO-Activist’ list serve entitled "Reform the WTO! – But Where are the Ideas?" Rather to my surprise, about a week later I receive an e-mail from the WTO External Relations Division expressing strong interest in the article and inviting me to make a presentation at a WTO Symposium on "Issues Confronting the World Trading System". So it seems the ‘big ears’ of officialdom are listening. But are they really interested in genuine dialogue and constructive engagement? Or is this Symposium merely a ‘window-dressing’ exercise aimed at bolstering the image of yet another tarnished global institution? I accepted their invitation and went to Geneva to find out.
Trade and Prosperity
It came to my attention during the Symposium that in the preamble to its articles, the WTO has the stated goal of promoting global prosperity on an equitable basis – a wholly laudable objective. So first of all, we should perhaps think a little about prosperity itself and how it is created. For it should not be too difficult to surmise that if we define ‘prosperity’ as equitable and sustainable development, that must surely depend not just on trade but also on a healthy environment and a fairly paid and reasonably fully employed labour force. Rather like a Tristar jet, having only one or two of its three engines running just will not do: all three are needed if prosperity is to result. But here we can learn our first lesson about the nature of the WTO’s problem; that it is occupied with only one of the three engines: trade. The environmental and social ‘engines’ are left out of the equation on the assumption that, if sufficiently liberated, the trade engine will automatically fuel the other two. So whilst the responsibility for trade liberalisation and dispute settlement have been abdicated by nation states to the WTO, social and environmental protection issues remain solely within the ambit of individual nation states who, as the pervading theory goes, should not need to worry because increased trade will take care of them.
We should, however, be clear about why ‘trade’ occurs at all. Well, as a businessmen (as well as an activist) I can answer this question quite easily: trade only occurs when a profit can be made from the transaction. And to profit to the maximum extent, costs must clearly be reduced or, preferably, eliminated altogether. Unfortunately, however, labour is a cost and so is environmental protection. In the trade equation, profit is a ‘plus’ and labour and the environment are inescapably ‘minuses’. So there is obviously a natural tendency for trade to occur at the expense of the environment and with an ever-present drive to minimise or eliminate labour. And in today’s highly competitive environment, failure to minimise those costs as efficiently as one’s competitors ultimately means going out of business. Strangely though, politicians, trade negotiators and economists seem to be rather blind to this simple truth.
Now free marketeers will tell us that increased trade is needed to create the necessary wealth to support labour and protect the environment: the one will necessarily lead to the others. They say that the rich countries first underwent rapid economic growth during the 1960s which produced the necessary wealth then spent on achieving higher environmental and social standards. To demonstrate this, they confidently wheel out the famous ‘Kuznets Curve’, as did one speaker at the opening plenary of the Symposium. This purports to demonstrate how trade initially makes environmental conditions worse but, with time, the wealth created from trade is used to improve environmental and social protection. And so it will also be, they say, for poorer countries if only we further liberalise trade today and grant poorer countries better access to Northern markets. Hence the rationale for focusing on the trade engine of our ‘prosperity Tristar’ whilst ignoring the environmental and social engines on the assumption that, in time, they will run all by themselves.
Unfortunately, however, the above rationale ignores some fundamental structural changes which characterise today’s global economy and which were not generally present in the 1960s and 1970s. In those days, capital was not free-flowing as it is today and corporations tended to be national rather than global. This meant that in the 60s and 70s capital and corporations generally remained within the regulatory ambit of national governments who could then impose the necessary measures to protect labour and the environment without fear of capital and corporations moving elsewhere. They were also in a position to implement redistributive taxation and other necessary measures resulting in a virtuous prosperity circle. So governments, as the pilots of our plane, were able to maintain a reasonable balance of fuel supply between the three engines – each engine could be harnessed to reinforce the others to promote yet more prosperity.
Who Should Carry the Can?
In today’s global economy, by contrast, these conditions no longer apply. For capital and corporations now move across national borders to wherever costs are lowest and profits highest. This forces nation states into competition with one another to maintain inward investment and so protect jobs. But in their quest to maintain their ‘international competitiveness’, they must progressively down-level social and environmental protection, increase privatisation, compete in lowering taxes and so on to maintain an economic environment ‘conducive to business needs’. All of this translates into a deteriorating environment, a rapidly expanding gulf between rich and poor, an unraveling of social cohesion and a noticeable tendency of under-privileged sections of society to resort to far-right political parties. Not for nothing do we witness rioting in many northern English cities and other signs of social breakdown in other countries. Indeed, the dynamic of today’s global market has removed from governments of any political leaning, the freedom to pursue those restorative policies their predecessors of the 60s and 70s were able to benefit from. Instead, the power of today’s markets is such that governments have effectively become the puppets of a quasi-dictatorship of transnational capital which demands business-friendly policies regardless of the party in power.
So when WTO Director-General, Mike Moore, said in his opening speech that "…trade alone is not the answer, but it is part of the cocktail necessary for progress. Good governance, debt-relief, infrastructure investment, education, sustainable development, health programmes all have a role to play", he was right. But what he unfortunately fails to understand is that the competitive dictates of today’s globally mobile capital markets leave nation states in no position to ensure these other necessary ingredients of the cocktail actually get into the drink. In fact global competition systematically ensures that they don’t. George Soros was the only speaker who recognised this fact when he said "free trade is great for producing private goods but lousy for producing public goods." And for heaven’s sake, having broken the Pound out of the European Exchange Rate Mechanism (ERM) in 1987 at huge cost to British tax payers, isn’t he in a good position to know?
So this is where the WTO now finds itself: nation states have mandated it to do a job and expect it to achieve high scores, not just for trade, but for global prosperity as a whole. But this mandate is based on a premise which no longer obtains. And as such, there is no way the WTO can fulfil its stated objectives. Furthermore, since neither nation states nor the WTO can re-regulate the competition induced by freely mobile capital which systematically prevents environmental and social considerations from being taken into account, it’s not the WTO which should be the focus of our attention. Instead it is the global free movement of capital and corporations. For it is the international competition their free movement has set in train which has, as it were, interfered with our Tristar’s fuel supply system ensuring that the trade engine gets all the fuel while systematically depriving the others. But running, now, on only one wing engine as the global economy is, our plane can only keep going round and round in circles – until, of course, it eventually runs out of fuel. So it’s not the WTO who should take the lion’s share of the blame. Instead it was our politicians who de-regulated capital markets in the first place. It is they who should carry the can.
On top of this, governments are also largely powerless to control the rapid increase in corporate domi-nance and power. As free markets have served to increase competition, so the need for corporations to take shelter from competition and hostile takeovers has in turn forced a drive to unprecedented consoli-dation through daily mergers and acquisitions. Furthermore, their ability to move production to lower cost countries, combined with the competition between those countries for inward investment, serves merely to destroy First World jobs and to keep Third World wages at sweat-shop levels. This points up the fallacy that increased trade will significantly benefit poorer countries. For it is not the poor who benefit, but mostly the foreign corporations. The dramatic difference in wage levels between rich and poor countries is, of course, pocketed by the corporations to fund further takeovers and excessive executive salaries all in the name of ‘increasing shareholder value’. It therefore remains highly questionable whether granting greater access to Northern markets will have any substantial long-term impact on poverty and development in the Third World. Indeed, with an increasing proportion of world trade now controlled by a few global corporations who rank as larger economic units than many nation states, here we see another paradox of the global ‘free’ market: that far from increasing competition or benefiting poor countries or lowering prices for consumers, unfettered competition has the ultimate effect of producing its very opposite: cartels and monopolies and a concentration of market power in ever-fewer hands.
Indeed, in the current economic environment, governments cannot possibly hope to balance public and private interests. So captive have they become that private goods are actually eating up public goods as governments find themselves increasingly unable to raise adequate taxation to fund schools and hospitals. Instead they must turn to the "efficient" private sector through creeping privatisation, out-sourcing of public services to private contractors and mortgaging their nation’s future through so-called "Public-Private Partnerships" or other similar devices. Now subject, therefore, to what are irreversible, business-friendly political conditions, the notion that increased trade can eventually result in improved social or environmental conditions is either pure wishful thinking or outright deception. Our Tristar jet is fast losing two of its engines and global warming, inner city rioting, Third World debt, poverty, bloated prison populations and a widening gap between rich and poor are all evidence that our plane could soon flip over and crash if appropriate action is not taken soon.
Teaching the Dogs to Eat the Carpet
All this reminds me of an incident which is said to have occurred in the Nixon White House. Nixon was disturbed by the fact that his dogs had taken to nibbling at one of his favourite Persian rugs. In an attempt to prevent this, Nixon threw chunks of steak to his dogs to distract them but the carpets kept on getting nibbled. One day Henry Kissinger walked in on this ritual and proceeded to suggest to Nixon that, far from preventing it, throwing steak to the dogs was actually encouraging them to eat the carpet. The more carpet they nibbled, the more steak they got! And is this not the vicious circle we now see occurring in today’s global economy? The imbalance in kerosene distribution to our plane’s engines promotes a myopic mind-set which, when confronted by evidence clearly showing that increased trade simply isn’t working for the poor or the environment, induces a response which triggers yet more trade liberalisation as the solution. It therefore exacerbates the problem while thinking it is actually solving it. As the global economy faces a dramatic slowdown, global environmental problems continue apace and the gap between rich and poor keeps on widening, is it any wonder that instead of questioning fundamentals, the WTO and its more powerful members are instead all calling for a new "development" round of trade liberalisation?
So a further lesson we are learning here, is that an integrated management approach which ensures that economic, social and environmental concerns are all adequately and equitably met to produce the maximum prosperity for the common good is vital. Yet nation states appear incapable of re-regulating transnational capital and corporations; the factors which prevent them from providing that management.
Rules are Not Governance
Since governments are incapable of looking after social and environmental concerns in the global market, some commentators argue that the WTO should be required to build social and environmental concerns into its ambit of trade rules. But while this may sound like a great idea, we should think about this very carefully. After all, the WTO operates by agreeing, and then rigorously imposing, a set of rules. But ‘rules are rules’ and that necessarily means a ‘one size fits all’ regime for all nation states. Now this might at first sound perfectly fair. But we must remember that the nations of the world find themselves at dramatically different stages in their development. Can it be right, realistic or fair, for example, to expect Guatemala to have the same environmental standards as Germany? Would we expect a featherweight boxer to be pitted against a heavyweight? Of course not. But these are the outcomes of a rules-based system which necessarily ignores fundamental differences between the world’s nations and their ability to compete on a level playing field. So although a ‘rules-based system’ may sound eminently fair and reasonable, we would be foolish to pretend it will necessarily result in fair or appropriate outcomes. Indeed, rules alone are not enough.
What is also needed are methods of raising global taxes; of redistributing incomes across borders to the poorest; of providing debt-free technical assistance to non-industrial and developing countries to help them out of poverty and to meet higher environmental and social standards and so on. In other words, what is needed are all those traditional strategies which were once available to the governments of individual nation states to keep all three engines running but which are now denied them. In other words, we need more than merely ‘rules’. What we need is GOVERNANCE. But the free movement of capital and corporations now dictate that it is now needed on a global scale. However, to give such powers to the WTO, or even to the UN, when neither institution has any form of direct, democratically elected parliament would be to court global dictatorship – benevolent or otherwise.
So as global problems worsen and existing institutions offer no way out of our dilemma, our true quest is for a form of global governance which can at once allow nations to regain control of global capital and corporations while providing a global framework of co-operation which allows each nation the freedom to pursue social and environmental objectives in such a way that is respected and upheld by all. Instead of abdicating these responsibilities to institutions such as the WTO who, as we have seen, are wholly incapable of producing desired outcomes, nation states should once again shoulder these responsibilities themselves. But simply doing so in the current mode of blindly and selfishly pursuing ‘the national interest’, is not the answer. For underlying the present trade liberalisation is an intense international competition for economic supremacy which, as we have seen, no nation can ultimately win and, as our Tristar analogy shows, all are likely to lose. Equally, a simple return to the tit-for-tat competition of old-style protectionism also provides no satisfactory answer. For that, too, is a competition no one can win.
But how on Earth can these vital objectives be achieved in a practical, responsible and secure way which is acceptable and beneficial to all? How can global governance be achieved without the pitfalls of global government? How can a transition be made from global competition to global cooperation?
Radically innovative yet practical ideas are now surfacing which show how politicians, the growing body of civil society activists, and disaffected voters can begin to find answers to these questions. One such idea is expressed in the initials 'SP' -- the Simultaneous Policy -- a new and achievable way of removing the barriers of fear and destructive competition which today prevent us from finding solutions.
A full explanation of the Simultaneous Policy (SP) campaign is set out in "The Simultaneous Policy – An Insider’s Guide to Saving Humanity and the Planet" by John Bunzl. Copies available from the above address.
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