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The Geneva Men: A Review of ‘Globalists’ by Quinn Slobodian

A review of Quinn Slobodian, 2017. Globalists: The End of Empire and the Birth of
Neoliberalism. Boston, MA: Harvard University Press.

https://images-na.ssl-images-amazon.com/images/I/51kcoHzJqyL._SX329_BO1,204,203,200_.jpgNeoliberalism and globalism have both become buzzwords used within the political discourse by intellectuals, journalists, as much as celebrities in order to describe and explain recent events. But what are really neoliberalism and globalism, and in what relation do they stand to each other? Quinn Slobodian argues in his recent book Globalists: The End of Empire and the Birth of Neoliberalism, that neoliberalism and globalism are commensurate concepts, an economic doctrine on the one hand and a political worldview on the other, both mutually reinforcing a particular form of contemporary capitalism. Slobodian puts the notion that neoliberalism lacks a clear referent to rest. Instead, he argues that neoliberalism and globalism have existed as a coherent body of thought since the 1920s. Tracing the origins and consequent development of these ideas, he offers the readers a richer, more precise history of both the idea and practice of neoliberalism-globalism, with particular attention to their relationship with sovereignty and democracy. As such, he provides us with a much needed historical and theoretical corrective to the oft repeated and yet often historically inaccurate theories of neoliberalism.

Donald Trump, who railed against ‘globalism’ on the campaign trail, was elected in 2016 partly on a platform of defying free trade agreements like the Trans-Pacific Partnership and NAFTA. Similarly, we have recently witnessed a proliferation of anti-EU forces from both the left and right in Europe, notably in form of Brexit in the UK and in Italy’s recent elections. Mexico has also recently elected the ‘populist’ Andres Manuel Lopez Obrador, who threatens to destabilize NAFTA, at least as we know it. These political upheavals against the postwar world order make Globalists a timely and necessary reading for anyone interested in intellectual and economic history.

Central to Slobodian’s argument in Globalists is a rejection of the idea that neoliberalism can simply be reduced to ‘market fundamentalism’, a term central to Karl Polyani’s critique. Rather, Slobodian argues, neoliberalism is a form of regulation, rather than a radical opposition to regulation; it is a form of regulation that seeks to reshape societies to be more favorable to the interests of the market and of the capitalist class, in opposition to democracy and sovereignty if necessary.

Typically, histories of neoliberalism begin somewhere around the Reagan and Thatcher governments of the 1970s. However, Slobodian traces the history of neoliberalism further back, beginning in Austria in the 1920s with the fall of the Austro-Hungarian Empire and of the House of Hapsburg. During this time of the beginning of the end for the old empires of Europe, Austria held its first election with universal male suffrage, catapulting the radical Social Democratic Party to previously unforeseen influence in the government. Without the autocratic counterweight of the Hapsburg monarchy, conservative Austrian elites feared that their privileges and class power would be undone by the new democratic government. In response, the Austrian nomenklatura, now-infamous names like Friedrich Hayek and Ludwig von Mises among them, called for a renovation of the capitalist class’s approach to managing power. Their proposed solution was not only intended to the challenge social democracy and the global compounded rise of nationalism, socialism, but also more crucially democratic self-determination. To the capitalist class these forces represented different sides of the same basic threat: the rubes of the world, incapable of governing themselves, turned against their betters. In the words of Lionel Robbins, one of the first ardent globalists, ‘”Mines for miners” and “Papua for Papuans” are analytically similar slogans.’

Contrary to widespread belief, the Austrian School of Economics, as Hayek and Mises’ faction are often called, did not propose a regime of laissez-faire economics as we normally understand it. Rather, they sought to overcome the limitations of the old regime of mercantile colonialism, which divided the world territorially amongst competing camps of European capitalists, through the use of truly global institutions—the League of Nations, the European Court of Justice, the World Trade Organization, international investment law, etc. — to insulate markets. Their basic ethos could be summed up as follows: ‘International institutions should act as mechanisms for protecting and furthering competition without offering spaces for popular claims-making’ (p. 271). This, they believed, would protect the profits of the capitalist class against the laws of sovereign states, political instability, and demands raised by civil society and workers for greater equality and social justice. Many leaders of the early neoliberal movement relocated to Geneva in order to influence the shaping of these institutions, leading Slobodian to call them the ‘Geneva School’ (p. 7). The Geneva School was closely tied to business and finance, and its members moved easily between academic settings and lobby organizations such as the International Chamber of Commerce.

The popular (mis)understanding of neoliberalism is perhaps best represented by Karl Polyani’s description of the movement in The Great Transformation, where he uses the term ‘market fundamentalism’ to describe the Geneva School ideology. In this interpretation, neoliberals advocate for ‘disembedded’ markets which, separated from society, replace social bonds with atomized relations, giving rise to counter-reactions within society in the form of either xenophobic nationalism or revolutionary socialism. Slobodian, however, identifies the objective of the Geneva School instead as ‘enclosing’ markets in international institutions and treaties. Far from being fundamentalists with an irrational faith in the market, Hayek and Mises readily accepted that markets are ‘products of the political construction of institutions [which] encase them’ (p.7).

The first economic gathering to take the entire world as its subject was the World Economic Conference of 1927. Famous neoliberals like Mises, Gottfried, Haberler, Röpke, Hayek and the aforementioned Robbins all took a direct role in the conference and the subsequent declaration advocating global economic governance, codifying international opposition to ‘trade obstacles’ on the part of the European elite (p. 30). This is the first attempt documented in Globalists of neoliberals trying to conjure up a supranational federation of capitalists as a way to offset the dual pressures of national economic planning and decolonization.

The wave of independent nation-states rising from the ashes of empire after the world wars prompted greater urgency for such a supranational power. From the perspective of capitalists and their neoliberal lieutenants, these were adversaries to be thwarted. ‘For [Mises]’, writes Slobodian, ‘the real war was not between individual nations or empires but between the world economy and the nation as forms of human organization’ (p.109). It is from this capitalist project of ‘militant globalism’ against ‘economic nationalism’ 01b_wto_interior-(Heilperin, quoted on p. 130) that Slobodian traces the development of entities like the European Union, Free Trade Agreements and the Investor-State Dispute clauses they contain, as well as the World Trade Organization, and the neoliberal intellectuals’ instrumental role in their construction. While these institutions ultimately benefited the elites of the European countries and the United States, they required even the wealthy countries to acquiesce their sovereignty to dictates which spanned multiple sovereign jurisdictions, making them difficult to be challenged by any one government without inviting conflict.

Of particular interest to anthropologists, Slobodian focuses on neoliberal ambassadors’ deep interest in the area of culture. The globalists, from their vantage point in Geneva, left no intellectual or topical stone unturned. The Rockefeller and Ford Foundation, two of the largest funders of ethnographic projects to date, were generous in their support of neoliberal intellectuals seeking to broaden the conceptual scope of their project. The Rockefeller Foundation, for example, essentially bankrolled a study by Wilhelm Ropke in the Danube region which lambasted the locals for ‘economic simplism’ for seeking greater authority over their own economy (p. 75). Interestingly, Ropke considered this demand for economic control as a cultural phenomenon and sought to develop methods and instruments to reshape the culture of the Danube to be more accommodating to the global market.

Related imageGlobalists is effective in its ability to lay bare and substantiate with broad source evidence what Slobodian classifies as some basic truths about neoliberal ideology. The book also weaves a convincing narrative about these tenets and their implementation across the modern world. The basic principles Slobodian ascribes to neoliberal globalism are mostly described in negatives. The first is neoliberalism’s aversion to democracy, particularly to democracy that cannot be manipulated or neutered in some way. Slobodian demonstrates this through quotations from neoliberal intellectuals, Mont Perlin Society memos, and internal documents of the European Union, IMF, and other bodies. The second is neoliberalism’s aversion to the nation-state and sovereignty, which binds capitalists by certain obligations which may limit their profits and liquidity, something Mises was particularly adamant about. The third and final, related to the proceeding points, is neoliberal globalism’s resistance to politicization; that states or peoples should have levers by which to regulate or transform their social conditions is the antithesis of the neoliberal project. The neoliberal globe is one without politics, especially without politics that could potentially interrupt the smooth expansion of the market. This may also explain why we can observe an uncanny rise of disturbing pseudo-politics within the last decades.

Neoliberalism as a body of thought and its Geneva School ambassadors have had profound political, economic, and cultural influence on the modern world. Globalists does an excellent job of summarizing and explaining neoliberalism’s development, its core principles, and its direction. It is also a retort to lazy analyses of neoliberalism, which focus solely on aspects of economic policy or reform, and not on the other arenas of human life – culture, politics, international relations, etc. – which the Geneva School has actively and consciously sought to shape, along with Keynesians, imperial bureaucracies, business lobbyists, activists of certain stripes, and a host of other actors. Globalists is a valuable and refreshingly thorough book which clearly defines and scrutinizes the intellectual and practical components of neoliberalism in a manner which is deserving of commendation.

This of Dr. Quinn Slobodian’s most recent book was originally written for and published in the Journal of Extreme Anthropology as part of their forthcoming special issue on SOVEREIGNTY, which you can access here. A pdf of the review is available from the JEA page and on my academia.edu page.

As part of my work maintaining Peripheral Thought, we will soon publish a series of articles on SOVEREIGNTY, in part inspired by and intended to accompany JEA’s release of the special issue on the same topic. 

The suggested citation for this review is:

Lutes, Abram. 2018. “The Geneva Men: A Review of ‘Globalists’ by Quinn Slobodian” in Journal of Extreme Anthropology, Vol. 2, no. 2: Sovereignty.

 

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NGO’s and Empire Maintenance: Aid distributors versus popular sovereignty

“If you have come here to help me, you are wasting your time. But if you come because your liberation is bound up with mine, then let us work together.”

Aboriginal activists group, Queensland, 1970s

Among the many foibles and spectacles which have characterized the presidency of Donald J. Trump, was his threat to withdraw humanitarian aid from foreign countries on two occasions, the first being a threat against any and all countries who did not vote for the US’s UN resolution to recognize Jerusalem as the capital of Israel, the other threatening to cut off aid to US ally Pakistan if Pakistan did not meet a series of demands, particularly compliance with the Trump administration’s strategy in Afghanistan.

In both instances, Trump and his UN ambassador Nikki Haley reiterated an old American myth that all US aid is disinterested charity, effectively accusing the Global South of being international welfare bums. They also assumed that US aid was indispensable to Global South countries’ survival. Yet, both Pakistan and Palestine in different ways sent a very distinct message; “we don’t care” and “we don’t need you”.

In Trump’s brash displays of bravado, he may have unwittingly contributed to the unraveling of one of US imperialism’s most effective “soft power” techniques for maintaining the loyalty of intermediaries in the Global South, namely international “aid”. International aid from the Global North cores to the Global South peripheries is by and large managed by government institutions like USAID in the United States and Global Affairs Canada (GAC) but enacted by private actors often referred to as Non-Governmental Organizations (NGO’s). NGO’s have proliferated since the 1980’s, interestingly in tandem with the rise of neoliberalism. Contrary to what much of their branding might suggest, they are essential pillars to the maintenance of imperialism today.

The “Caribbean letter”: On agency and neocolonialism in Haiti

In addition to Trump’s grandstanding, international aid has also captured recent news due to the scandals rocking once-respected Oxfam International, namely widespread sexual exploitation of Haitians by Oxfam employees and alleged use of prostitutes in Chad, and the arrest of Oxfam’s director for corruption charges related to his former role as president of Guatemala. Any of these scandals on their own would potentially topple one of the titans of the NGO industry, renowned in the Global North for its progressive credentials on issues such as gender and income inequality (though usually only from the perspective of imperial core navel-gazing), together they might mean a spectacularly quick demise.

Both these scandals have history behind them and were made possible by the deep structural characteristics of NGO’s as “force multipliers” (Forte, 2015) of US and Canadian imperialism. As a signed letter to The Guardian from Caribbean intellectuals and organizers pointed out:

“In 2008 some of us had written to Barbara Stocking, then Oxfam chief executive, objecting to a report that it sponsored, Rule of Rapists in Haiti, which labelled Haitians as rapists while hiding rapes by occupying UN forces. The year before, 114 soldiers had been sent home for raping women and girls, some as young as 11. No one was prosecuted. We wrote: “NGOs like Oxfam have known about rapes by UN forces, as well as by aid and charity workers, for decades. It’s the pressure of victims, women and [children] in the most impoverished communities, who had the courage to speak out that finally won … public acknowledgement.” There was no reply.

The latest revelations of sexual abuse by major charities…are but one facet of NGO corruption. The people of Haiti were the first to free themselves from slavery, but the colonial “masters” they defeated – France, Britain and the US – have continued to plunder and exploit, including through imported NGOs. Haiti has more NGOs per square mile than any other country and it remains the poorest in the western hemisphere. Corruption begins and ends with neo-colonial powers.

While celebrated for “doing good”, NGO professionals do well for themselves. They move between NGOs, academia and political appointments, enjoying a culture of impunity while they exercise power over the poorest. The Lancet described NGOs in Haiti as “polluted by unsavoury characteristics seen in many big corporations” and “obsessed with raising money”.

(Le Cointe, Altheia, Luke Daniels, Cristel Amiss et al., 13 February 2018)

This widespread abuse often goes unnoticed by the Global North public, whose tax dollars often subsidize these projects (Oxfam receives significant funding from the UK government). In fact, in a survey of the Canadian public, 91% of Canadians expressed at least “some confidence” while 41%, almost half, expressed “great confidence” in NGO’s (Barry-Shaw and Jay, 2012b). Canadians also see themselves as widely loved throughout the world (Barry-Shaw and Jay, 2012a). Yet, as the “Caribbean letter” demonstrates, Canadian NGO’s have more questionable reputations than the wider public might assume.

The normalization of NGO’s masks a series of insidious imperialist operations. In Haiti, NGO’s were used to conceal the increasing military role of the “international community”, headed by the United States, on the island. The US has twice intervened to overthrow popular Haitian president Jean-Bertrand Aristide, once in 1991 and again in 2004. The troops stationed in 2004 to quell pro-Aristide unrest remain in the country and are a key component to the management and distribution of international aid, and NGO’s are required to cooperate with these occupying forces. These same NGO’s, especially Quebec-based ones, cheered the overthrow of Aristide in 2004 (Forgie, 2014; Barry-Shaw and Jay, 2012b). Numerous NGO’s were also enlisted by the Clinton Foundation to engage in its “development projects”, which as we have discussed before, were in fact a scheme to loot poor Haitians. Such practices are more commonplace than the trusting Canadian public might assume, as state donors like USAID and GAC, or private foundations like the Clinton or Gates Foundation leverage their vast supply of funds to encourage NGO’s to act as maintenance tools for imperialism (Frogie, 2014; Reith, 2010).

BLUE-Green_Falcons_Team_With_Medical_Teams_International_to_Reach_Out_in_Haiti_DVIDS246857

That NGO’s describe such schemes as “partnerships” between themselves and government or corporate entities conceals the power imbalance between government and foundation funders and the NGO’s “on the ground”. Sally Reith (2010) describes this as the “Trojan Horse” of development discourses, implying a level, depoliticized playing field. Meanwhile, aid has a precisely political character to it, usually in favour of maintaining imperialism and neocolonialism (Engler, 2015). USAID, which is run by the US State Department, makes no secret of this, saying its purpose is to “further America’s interest while improving lives in the developing world” (emphasis added).

The Kennedy administration created USAID in 1961, and since then the agency has been the proving ground of US foreign assistance objectives. It has been proven that countries rotating onto the UN Security Council received on average 59% more aid. As soon as their term ended, aid would fall to historic lows (Kuziemko and Werker, 2006). In a related study, T.Y. Wang (1999) found that UN voting patterns on vital issues to American interests were successfully swayed through the practice of aid giving, rewarding compliance and punishing political defiance. NGO’s are often bound to these funding streams, making the name “non-governmental” seem quite unusual given their actual reliance on western government aid.

Youthful Idealism: From impetus for revolt to marketing technique

Related imageThese contemporary practices often coexist with NGO branding which promotes the role of western young people as “change-agents”, not only in their own societies, but across the entire world (Biehn, 2014). This is a legacy of the origin of NGO’s, especially in Canada, which grew out of attempts to neutralize the new anti-war left during the Pearson and Trudeau Sr. years. Many now-mainstream NGO’s such as CUSO, mostly composed of youth and students, were highly critical of the Vietnam war, and openly criticized the politicization of food aid by Canada as part of the Cold War. These organizations were lured by the relative tolerance of Pearson and Trudeau Sr.’s foreign policy, leading eventually to their institutionalization (Barry-Shaw and Jay, 2012b). CUSO was absorbed through a government coup of its board of directors, which ripped control of the organization away from its volunteers, while organizations like the Inter-Church Council (now KAIROS), had their funding slashed for criticizing neoliberal structural adjustment (Barry-Shaw and Jay, 2012a), the beginning of “funding discipline” as a technique for maintaining NGO’s as part of the imperialist nexus.

The idea that NGO’s were an expression of youthful change-making, however, was preserved, pivoted to neoliberal ends. Biehn (2014) scrutinizes this, demonstrating how recruitment messaging directed at potential volunteers enforces neoliberal, capitalist understandings of the problem of and potential solutions to global inequalities. Problems are thus decontextualized and depoliticized. The messages reinforce a desired image of the Western youth as a powerful actor, an impetus for change, and an inspiration (Biehn, 2014).

One of the organizations Biehn uses as a case study is International Student Volunteers (ISV). I had a colleague working on a research project with ISV, which we discussed. She was quick to express her frustration with the organization being dominated by a particular milieu of people, what I would call the professional-managerial stratum along with a particularly involved section of the liberal bourgeoisie. These “white and privileged” (her words) families dominated ISV much to her frustration (her project was to find ways to increase the diversity of ISV volunteers). In hindsight, I would argue this is to be expected, as Biehn points out, ISV-style volunteerism is a noteworthy instrument for reproducing the orientation and allegiance of Global North professionals with imperialism.

Similarly, I had peers embark on various humanitarian trips, usually ranging from one to two weeks, to Haiti immediately following and a few years after the earthquake. These trips, usually financed by a combination of Foundation sponsorship, NGO collaboration, and church-based fundraising, consisted of typical volunteerism – building cheap churches, schoolhouses, etc. Looking back, it is fascinating to me that none of these students reported back anything of the political unrest and popular resentment of Haiti in their glossy presentations once they returned home, and enthusiastically accepted the presence of US marines on the island without question. The sheltering of the future young professionals and aspirant bourgeoisie whilst providing them an “authentic” experience of aid and poverty, helps create the conscious ignorance which characterizes the transnational capitalist class (Biehn, 2014; McGoey, 2012).

South-South cooperation and the urgency of Solidarity

If any more evidence was required to demonstrate that Oxfam and similar NGO’s are part of the imperialist establishment, consider that Winnie Byanyima, the Executive Director of Oxfam, appeared at the 2014 World Economic Forum in Davos, Switzerland. Ostensibly, Oxfam was there to represent the voices of “ordinary people” to the global conference of oligarchs and elites, though as Marc Wergerif (2018) points out, no one asked them to speak for them. The assumption by Oxfam that it speaks for “ordinary people” is undercut by its actual collaboration with US imperialism and the transnational capitalist class and its failure to actually advocate solid propositions of popular organizations like La Via Campesina peasants’ coalition, or the Bolivarian social movements, or god forbid movements in the Global South organizing more explicitly for sovereignty against imperialism, such as the Syrian reconciliation movement.

Image result for via campesina

Furthermore, why should a transnational foundation, run mostly by cosmopolitan professionals from the Global North and a handful of compradors, speak for “ordinary people” as a homogenized mass, and not their national representatives? Wergerif says it will be popular practices and movements that will provide the solutions for global challenges, not the schemes of agencies like Oxfam. One should note that as US imperialism continues to experience an economic and strategic decline, its beneficiaries are increasingly desperate to portray its maintenance as humanitarian, internationalist, and benevolent in nature. Meanwhile, we can see an increasing trend towards South-South cooperation in the form of Latin American integration and Chinese partnerships with Africa and the Bolivarian states, anti-EU groundswell in the form of Brexit, and a general working-class rage catapulting both right and left forces to prominence in the Global North. As Wergeif says, these “people’s everyday practices” have done much more to unravel the foundations of systematic inequality than the docile managers at Oxfam could accomplish. What directions these anti-systemic trends will take remains to be seen, but it is certain that they will increasingly delegitimize NGO’s as vehicles for social change.

References

Ayed, Nalaha. 15 February 2018. “Oxfam scandal highlights spectrum of abuse: local staff, recipients — aid workers, tooCBC.

Barry-Shaw, Nikolas and Dru Oja Jay. 2012a. “NGOs and empire: Canadian aid agencies take empire building seriously” in Briarpatch.

Barry-Shaw, Nikolas and Dru Oja Jay. 2012b. Paved with Good Intentions: Canada’s development NGOs from idealism to imperialism. Halifax, NS: Fernwood Press.

Biehn, Tristan. 2014. “Who Needs Me Most? New Imperialist Ideologies in Youth-Centred Volunteer Abroad Programs” in The New Imperialism, Volume 4: Good Intentions, Norms and Practices of Imperial Humanitarianism. Edited by Maximilian C. Forte. Montréal, QC: Alert Press, 77-87.

Chandran, Nyshka. 3 January 2018. “Pakistan is ditching the dollar for trade with China — 24 hours after Trump denounced the countryMSNBC. 

Cornwall, Andrea. 2003. “Whose Voices? Whose Choices? Reflections on Gender and Participatory Development.” World Development Vol. 31, no. 8: 1325-1342.

Donnan, Shawn. 1 January 2018. “Donald Trump threatens to withhold US aid to PakistanFinancial Times.

Engler, Yves. 2015. Canada in Africa: 300 years of aid and exploitation. Halifax, NS: Fernwood Press.

Forgie, Keir. 2014. “US Imperialism and Disaster Capitalism in Haiti” in The New Imperialism, Volume 4: Good Intentions, Norms and Practices of Imperial Humanitarianism. Edited by Maximilian C. Forte. Montréal, QC: Alert Press, 57-75.

Forte, Maxmillian C. 2015. “Introduction to Force Multipliers: Imperial Instrumentalism in Theory and Practice” in The New Imperialism, Vol. 5: Force Multipliers: The Instrumentalities of Imperialism. Montreal, QC: Alert Press, 1-87.

Le Cointe, Altheia, Luke Daniels, Cristel Amiss et al. 13 February 2018. “NGO crimes go far beyond OxfamGuardian. 

McGoey, Linsey. 2012. “Philanthropcapitalism and its critics.” Poetics Vol. 40, no.2: 185-199.

Kuziemko and Werker. 2006. “How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations” (draft) in Journal of Political Economy (forthcoming).

Nichols, Michelle. 21 December 2017. “Defying Trump, over 120 countries at U.N. condemn Jerusalem decisionReuters. 

Perez, Sonia. 13 February 2018. “Guatemalan ex-president, Oxfam chief held in corruption case.ABC News. 

Ratcliffe, Rebecca and Ben Quinn. 11 February 2018. “Oxfam: fresh claims that staff used prostitutes in ChadGuardian.

Reith, Sally. 2010. “Money, power, and donor–NGO partnerships.” Development in Practice 20(3): 446-455.

Staff. 3 January 2018. “‘Jerusalem is not for Sale’: Palestine to Trump after US threatens to cut $300mn aidRussia Today.

USAID. N.D. “Who We are”.

Wang, T.Y. (1999). “US Foreign Aid and UN Voting: An Analysis of Important Issues” in International Studies Quarterly, Vol. 43, no. 1: 199-210.

Marc C. A. Wegerif. February 2018. “People’s everyday practices, not the elites of Davos, hold the human economy answer to inequality” Pambazuka

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IMPERIAL DECLINE

Translation: CETA comes into force – a scandal for democracy

This piece by French theorist and political economist Jacques Sapir, originally posted on his blog in French and republished in Italian by Voci Dal L’estero is now featured in English here on Peripheral Thought. Sapir argues that, in addition to the risks to public health and environmental integrity, The Canada-EU Trade Agreement (CETA) is a serious violation of the principles of national sovereignty and democracy. The translation below has been edited for clarity. 

CETA, a free trade treaty between Canada and the European Union, which finally came into effect on Thursday, September 21, is a striking demonstration of how states have renounced their sovereignty, leaving room for a new law, independent of the law of the states themselves, and not subject to democratic control.

CETA is, on paper, a “free trade treaty”. In reality however, it targets non-tariff regulatory norms that states may adopt, particularly regulations in the field of environmental protection. In this respect, CETA could start start a race to dismantle these protections. Added to this are the dangers deriving from the investment protection mechanism contained in the treaty. CETA creates a protection system for investors between the European Union and Canada, which thanks to the establishment of an arbitration tribunal, will allow them to sue a state (or the European Union) in the case of which a public measure adopted by that State may compromise what the treaty calls the legitimate earnings gains from the investment”. In other words, the so-called Investor-State Dispute Settlement (ISDS) clause (or RDIE) is in practice a mechanism for hedging future earnings. And this is a unilateral mechanism: within this framework, no state can, for its part, sue a private enterprise. It is clear therefore that the CETA will put investors in a position to oppose policy measures that are contrary to their interests. This procedure, which is likely to be very expensive for states, will certainly have deterrent effects with a simple process threat. In this respect, let us not forget that following Dow Chemical’s statement of wanting to bring the case to court, Québec was forced to step back on the ban on a substance suspected of being carcinogenic contained in a herbicide marketed by this company.

There are also doubts about reciprocity: it is said that the Treaty opens Canadian markets to European companies, yet the European Union market is already open to Canadian companies. Just look at the disproportion between the populations to understand who will earn what. Beyond this, there is the wider problem of free trade, in particular the interpretation of free trade that emerges from the CETA treaty. At the heart of the treaty are the interests of multinationals, which certainly do not coincide with those of consumers or workers.

The risks represented by CETA therefore concern public health and, without doubt, sovereignty. But even more serious is the threat the treaty poses. At the time of its final vote in the European Parliament, four groups voted against: the Left Front, the environmentalists of ELV, the Socialist Party and the Front National. An alliance perhaps less abnormal than it seems, if one takes into account the problems posed by the treaty. It is instructive to note that it has been rejected by the delegations of three of the five founding countries of the European Economic Community and the second and third largest economies of the Eurozone. Nevertheless, it was ratified by the European Parliament on 15 February 2017, and it is now up to the ratification of individual national parliaments. Nevertheless, it is already considered partially in force before ratification by the national representative bodies. CETA therefore came into force provisionally and partially on 21 September 2017 in regards to aspects concerning the exclusive competence of the EU, with the exclusion for the moment of certain aspects of competing competencies that will need to be voted on by EU member countries , in particular those elements of the treaty dealing with arbitration tribunals and intellectual property. But even despite this, about 90% of the provisions of the agreement are already in force. This is a serious problem of maintaining political democracy. As if this were not enough, even if a country were to tomorrow reject the ratification of CETA, the already in-force aspects of the treaty would still have to remain in effect for another three years.

This is not what is normally understood by the phrase “free trade treaty”. This is a treaty whose purpose is essentially to impose rules adopted by multinationals on individual parliaments of the Member States of the European Union. If one wanted to give  a demonstration of the profoundly anti-democratic nature of the EU, this treaty would act as a pinnacle example.

This poses a challenge to the democratic credentials and legitimacy of those who have been advocating the treaty. In France, only one of the candidates for the presidential election, Emmanuel Macron, had declared openly in favor of CETA. Jean-Marie Cavada, one of the treaty’s main supporters, also voted in the European Parliament for the adoption of the Treaty. Thus, in the presidential election, and not for the first time in French history, the so-called “party from the outside which in a timely fashion had been denounced by Jacques Chirac from the hospital of Cochin for becoming defenders of the establishment. [1]

Prior to his appointment as Edouard Philippe’s government minister, Nicolas Hulot had taken a firm stand against CETA. His stay in government, under these conditions, has produced a turnaround. As a Minister of Environmental Transition, he certainly did not regret some last Friday morning on Europe 1. He acknowledged that the evaluation commission appointed by Edouard Philippe in July picked out several potential dangers contained in the treaty. But he also added: Negotiations have now come to such a point that unless we risk a diplomatic incident with Canada, which we would certainly want to avoid at all costs, it would have been difficult to block ratification”. This is a perfect description of the irreversibility [sic] mechanisms deliberately incorporated in the treaty. Let us not forget, too, that before being appointed Minister of Environmental Transition, the former television presenter had repeatedly stated that CETA was  not compatible with the climate”. One can imagine how hard that sword was to swallow.

For his part, since his election, Emmanuel Macron has tried to present himself as defender of the planet, answering Donald Trump’s slogan “Make America Great Again” with his own “Make the Planet Great Again “. He has often reiterated this slogan, both at the United Nations and on his trip to the Antilles after Hurricane Irma. But it can not be ignored that his commitment to CETA and its submission to the European Union environmental rules, which still has delayed on the issue of endocrine disrupters, show that his actions are not ecologically motivated and gestures towards environmental issues are best distasteful public relations performances.

We must have a full awareness of what the application and implementation of CETA means, including the dangers it poses as the national sovereignty, democracy and security of the country.

[1] Haegel F., “Mémoire, héritage, filiation: Dire le gaullisme et se dire gaulliste à RPR”, Revue française de science politique, vol. 40, no. 6, 1990, p. 875

Jacques SapirJaques Sapir is a graduate of the IEPP in 1976, he supported a postgraduate doctorate on the organization of work in the USSR between 1920 and 1940 (EHESS, 1980) and a Ph.D. in economics, Soviet economy (Paris-X, 1986).  He taught macroeconomics and finance at the University of Paris-X Nanterre from 1982 to 1990, and at ENSAE (1989-1996) before joining the School of Higher Studies in Social Sciences in 1990. He has been the Director of Studies since 1996 and heads the Center for the Study of Modes of Industrialization (CEMI-EHESS). He has also taught in Russia at the High College of Economics (1993-2000) and at the Moscow School of Economics since 2005.He leads the IRSES research group at the FMSH, where he co-organizes with the Institute of National Economic Forecasting (IPEN-ASR) the Franco-Russian seminar on the financial and monetary problems of development in Russia.

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ANTI-IMPERIALISM DONALD J. TRUMP EMPIRE GLOBALIZATION IMPERIAL DECLINE NEOLIBERALISM

Trump, Empire, and Syria (or, The Elites Just Bought Another War)

DONALD TRUMP: ANOTHER MAN FOR EMPIRE

“After losing thousands of lives and spending trillions of dollars, we are in far worst shape in the Middle East than ever, ever before. I challenge anyone to explain the strategic foreign policy vision of Obama/Clinton. It has been a complete and total disaster.” — Donald J. Trump, Campaign Speech on Foreign Policy

If anyone retains any illusions that Trump represented a true challenge to the “establishment” which he so vehemently claimed to oppose, it’s time to bury such fantasies alongside the bodies of the victims of the 59 ballistic missiles fired into an airfield outside Homs, Syria. Not only has Trump done nothing to alter the Bush-Obama proxy wars and occupations in Iraq, Afghanistan, Yemen, and Ukraine, but has escalated the US aggression against Syria, but now potentially in Korea (and I assume, eventually, Iran and Venezuela). Like Bush in Iraq, Trump is lunging into Syria on the presumption that the Syrian government used chemical weapons despite questionable evidence of this. Ironically, this also comes after a recent admission that the United States has used depleted uranium in Syria just as it did in Iraq.

This is in stark contrast to the foreign policy Trump campaigned on, or more precisely the foreign policy many Trump voters thought he was campaigning on. Despite threatening to tear up the Iran Nuclear Deal and bolster support for Israel, as well as the wild suggestion the US station nuclear warheads in South Korea, Trump also made a number of isolationist, even anti-imperialist sounding statements on the campaign trail, which appealed to voters who are  feeling exhausted by decades of imperialist wars. These statements were surprisingly consistent as well, alluding to positions Trump had described in his books, The America We Deserve (2000) and Time to Get Tough (2011). More recently, they also appeared in his tweets:

 

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The Orange Canary now sings a different tune.

What happened to the Trump who wrote these tweets? What happened to the Trump who trashed NATO, sought good relations with Russia, attacked the Clintons for overthrowing Qaddafi, who called the United States “not so innocent”, and promised to build jobs at home instead of sending soldiers aboard? I admit, I entertained the possibility that Trump might make good on these promises, but no longer. It’s  likely that this “progressive Trump” never really existed.Like Nixon and Obama before him, Trump is an opportunist, playing to both working class conservatism (in the form of anti-blackness, xenophobia, and settler-colonial nationalism) as well as more progressive impulses like universal health coverage and, of course, anti-interventionism, positions which are quickly abandoned once the opportunist is catapulted into power.

A possible silver lining in these dark times is that  perhaps now the nebulous “Trump coalition” will shatter into a million pieces. Between trying to push through detrimental health care policy and plunging the United States into another bloody, potentially catastrophic war, Trump has isolated both the working class and rural-dwelling voters who brought him victory and the bourgeois white nationalists who aggrandized him to the public. There may be an opportunity, through the channel of a revived anti-war movement, for the left to recapture the working class in the United States.

It should also be apparent to anyone paying attention now that the media is not a friend of progressives or any critics of US imperialism.  It should be clear that in spite of the aggressive attacks against Trump in major media outlets during the election, that the elites and their propaganda outlets were not really ever concerned with Trump’s xenophobia, his racist and sexist comments, or the likelihood that he is a rapist (and indeed, why would they be?),  these things were only instruments to the transnational capitalists against a figurehead they feared might put a wrench in their otherwise well-oiled war machine by seeking rapprochement with Russia and Syria. Now that Trump has fully committed to their version of Yankee imperialism, press coverage of Trump is glowing with praise. Of eighteen major editorials on Syria in five major papers, not one is critical.

Below is a stunning report featured in The Nation in March of 2017 which darkly foreshadows the pressure Trump must have felt from his wealthy friends and neighbors to have a good war. Trump himself has a vested interest in the war economy, owning significant shares in Raytheon, the manufacturer of the missiles launched at Syria. While reading this, consider that the “wealthy donors/elites” described as pushing for war also likely have controlling interests in the mainstream American media, which now rallies behind Trump’s genocidal ambitions.

WEALTHY DONORS AND MILITARY INTERVENTION

McElwee, Sean, Brian Shaffe, & Jesse Rhodes. 2017. “How Wealthy Donors Drive Aggressive Foreign Policy.” The Nation. 

Since Donald Trump’s ascension to the presidency Washington has struggled to get a handle on his administration’s approach to matters of war and peace. In recent weeks, there has been intense focus on the perceived influence of top presidential aide Steve Bannon, who is seen as extremely hawkish on national security matters, especially when it comes to combating Islamic terrorism and confronting China’s rising influence. The prevailing wisdom seems to be that Bannon’s prominence within the administration – highlighted by his appointment to the National Security Council – portends a more bellicose turn in American national security policy.

And despite his purported skepticism of defense spending and aversion to spending cuts, Trump’s new budget bolsters spending for defense by $54 billion while cutting spending elsewhere.

There are undeniable reasons for concern – if not outright fear – about Bannon’s appointment, particularly coupled with soaring military investment. But these worries obscure more systematic – if also more subtle – reasons for the United States’ persistent aggressiveness on the world stage. (After all, American military interventionism long preceded the Trump Administration and continued during the presidency of Barack Obama). Our research suggests that a major, if under-appreciated, base of support for the frequent use of American military force abroad is the enthusiasm of wealthy persons – and especially large political donors.

On several key questions, wealthy people – and, in particular, “elite donors” (those who contribute $5,000 or more, or the top 1 percent of all donors) – are much more enthusiastic about the projection of American force than are American adults. The enthusiasm of the most wealthy and influential private actors in American politics provides a durable reservoir of support for the assertion of American power abroad. Given the profound, and likely growing, influence of political donors in American politics, our findings suggest that strong political supports for American foreign interventionism will remain long after Bannon, and Trump, have departed the executive branch.

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These conclusions come from our ongoing research project on the preferences and contribution patterns of big donors. As part of this work, we investigated how preferences toward American military spending and the use of force compared between elite donors, wealthy individuals (those with family incomes of more than $150,000), all donors, and all American adults.

Our analysis drew on a cumulative data file from the 2008, 2010, 2012, and 2014 Cooperative Congressional Election Studies surveys. By pooling together multiple surveys, we were able to obtain an unusually large sample of these elite donors, as well as extremely large samples of several other groups: all political donors, individuals with family incomes over $150,000, and all American adults. (Across all surveys, there were 196,000 respondents.) To make the elite donor sample nationally representative, we re-weighted the sample using information from Catalist, a political data firm with information on more than 260 million adults, and the Federal Election Commission.

We also made efforts to ensure that we correctly identified large donors. While it’s unlikely that many people lie about contributing large amounts of money to campaigns — being an elite donor is not exactly a status that most people aspire to — we tried to account for this possibility by dropping from our analysis any self-identified elite donors who were not also validated registered voters. On the whole, our approach allowed us to examine the preferences of elite donors, and other groups, with a great deal of precision.

As a first observation, “elite donors” and wealthy Americans are more supportive of American military spending than are ordinary Americans. When requested to indicate whether they preferred to balance the federal budget primarily through cuts to defense spending, domestic spending cuts, or tax increases, 42 percent of American adults indicated that they preferred defense cuts. But only 25 percent of elite donors, and 36 percent of wealthy Americans, preferred that route.

We found that cutting defense spending was the most popular option for balancing the budget among ordinary Americans, but the least popular option among elite donors. And this is not simply a matter of partisanship — the “elite donors” and wealth Americans in our sample are fairly evenly divided along party lines. Further, within the parties, elite donors are more interventionist (that is, Democratic elite donors are more interventionist than non-donors and Republican elite donors are more interventionist than Republican non-donors).

Graph 1

Elite donors and wealthy Americans also seem to be more sanguine about the United States’ interventions in Iraq and Afghanistan. Among all adults, 60 percent consider the United States’ involvement in Iraq a mistake. But only 52 percent of elite donors do. The opinion gap between adults and elite donors on the United States’ intervention in Afghanistan is even wider. While 43 percent of the general public consider the Afghanistan intervention a mistake, only 27 percent of elite donors do.

Graph2

These findings point to the possibility that elite donors and wealthy Americans might be more favorably disposed to the use of American military force than are ordinary Americans. And, in fact, when it comes to attitudes about hypothetical military interventions, we find similar income- and donation-based effects. For example, while all of the groups in our analysis strongly support the use of American military force to protect allies under attack, elite donors and wealthy Americans are even more enthusiastic than are all American adults. Eighty-five percent of elite donors and 80 percent of wealthy Americans express support for the use of force in these circumstances, compared with 71 percent of adults.

“Elite donors” and the wealthy are noticeably more likely to support a military intervention to prevent genocide (50 percent and 51 percent, respectively) compared to the general public (40 percent). And elite donors and wealthy Americans are also much more likely to express support for military interventions to destroy terrorist training camps. Sixty-four percent of American adults supported this hypothetical; but 80 percent of “elite donors” and 76 percent of wealthy Americans did.

Graph3

Strikingly, we found that elite donors and wealthy Americans are more likely to express support for military interventions to ensure the American oil supply. While just 25 percent of American adults expressed support for such interventions, 35 percent of elite donors did, and nearly half (48 percent) of Republican elite donors did.

Graph4

These attitudinal differences matter. Recent scholarship on representation in politics strongly suggests that large donors and wealthy Americans exercise disproportionate influence on politicians, and that this bias is most notable on matters of national security and foreign policy. One reason that this might occur is that Americans feel less confident in judging debates over foreign interventions and often defer to elites on such matters, especially during conflicts.

Benjamin Page and Jason Barabas compared the foreign policy preferences of foreign policy elites using the Chicago Council on Foreign Relations surveys and found “many differences of 30, 40, and even 50 percentage points compared with the general public.”  Benjamin Page and Marshall Bouton find, in their book The Foreign Policy Disconnect, that “contrary to the assertions of many scholars, pundits and political elites,” “collective public opinion about foreign policy is not inconsistent, capricious, fluctuating or unreasonable.”

Rather, they argue, the general public “generally prefers to use cooperative and multilateral means to pursue foreign policy aims.” Kull and Destler also find that elites tend to misread public opinion, and that Americans aren’t isolationist, but rather favor multilateral intervention.

Political scientists Matt Grossmann and William Isaac also found the wealthy are more likely to favor “international intervention, international institutions, foreign aid, and trade agreements.” They found that the wealthy have a disproportionate impact on foreign policy: “affluent support for foreign policy proposals without average support leads to a very high adoption rate (69 percent) compared to foreign policy proposals with only average citizen support (38 percent).”

This applies not only to a more aggressive use of force internationally, but trade policy as well, as donors are more likely to support free trade agreements. In the 2014 CCES, 68 percent of donors contributing $1,000 or more support a US-Korea free trade agreement, compared to 57 percent of the full sample.

Most of the debates about money in politics center around domestic policy: Bernie Sanders’s campaign centered around the way that millionaires and billionaires blocked the progressive agenda. However, our research suggests that elite donors have different views about the global economy and use of force overseas than the general public. Donors often give money to enact that vision, such as the millions Sheldon Adelson and Haim Saban have given to shape policy on Israel. Politicians who buck the establishment on trade and military force overseas often find themselves quickly on the defensive. Donors are likely to oppose any attempt by Trump to cloister America from the international community, but they also are unlikely to tap the brakes if he moves the country towards war.

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Anti-Vietnam War cartoon from 1975.
Categories
USA

No Country for Poor Men: The Globalization Project and its Consequences

“Debt… is a cleverly managed reconquering of Africa.”Thomas Sankara

In the 1980s, on the tail-end of growing south-south unity and economic development, the world was plunged into an international debt crisis which threatened the sustainability of the capitalist world-system. The political decisions enacted to adjust the global economy ushered in neo-liberalism and globalization as we know them today. Thus, it is generally accepted debt was of central importance to the advent of neoliberalism. However, with the crises of debts reaching a seemingly terminal stage in various sections of the Global North and South every few years, it is clear that debt also constitutes a key element in the maintenance of neoliberalism and globalization as well. We can also understand the advent of globalization-via-debt crises as a response to the limits of the post-World War Development Project, in that the Development Project’s benefits to the Global South was not sustainable under capitalism and that it facilitated the instabilities which would create the conditions for Globalization.

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The project of neo-liberalism was ultimately a political one, relying on the extension of debt relations as a form of global governance imposed on the global south. This is captured in the phrase “debt regime” – the restructuring of debt by the IMF allowed western financiers to establish new economic and social “regimes” throughout the Global South based on the convictions of neoliberalism and free market practices.[1]

Poverty Governance = Imperialism

Institutions such as the International Monetary Fund (IMF) are thoroughly undemocratic, unrepresentative and unaccountable, just as they maintain an ideological affiliation to free market policy, unresponsive and thus resistant to change. The IMF functions like a corporation, with votes being allotted to countries based on “quotas” – determined by both the country’s economic size and the financial contributions of the country to IMF programs. Thus, the decision-making power of the IMF inevitably tends to favor already-developed Global North countries (McMichael, 2016), who accumulated their wealth initially through colonization.

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This must be considered when discussing the merits (or lack thereof) of globalization/neoliberalism. While Globalization is generally associated with increasing interconnectivity and interdependency (and this is at least nominally true), Globalization is more accurately the consolidation of international neoliberalism. Rather than being a foundation of innovation, as its pundits often claim, neoliberal policy is about the maintenance of a fragile economic system, where imperialist powers come together under this aegis, “globalization”, to ensure their own economic security, an arrangement preempted by Karl Kautsky under the auspices of “super-imperialism”[2]. While I do not accept all of the implications of a theory of super-imperialism (and there are certainly rivalries within the imperialist bloc), there is no denying the increasing integration of different imperialisms, for example the US-EU-Japan triad or the US-Canada-UK New Victorian network.

In practice, this ruling through a debt regime has meant the direct assault on the sovereignty and self-determination of colonized peoples. We have noted the undemocratic structure of the IMF and the history of inequality which facilitates its current structure. These unequal, authoritative powers were used as an unprecedented infiltration of the internal politics and economies of the Global South, with debt crises as the catalyst. Countries like Mexico, dependent on loans from banks based in the Global North to facilitate the development project, were ready to default on their loans, prompting a quick solution from the IMF before large blocs of defaulters could undermine the capitalist world-economy. The IMF instituted a program where existing loans would be extended, and new loans provided directly by the IMF to pay off these debts. However, this repayment plan was conditional; subject countries would have to agree to submit to a Structural Adjustment Program (SAP) which involved a swift privatization of numerous essential development and social programs. This greatly weakened the power of the postcolonial state to act as an anti-imperialist force and opened key markets to western domination (McMichael, 2016).

To extend these debt regimes, the United States and most other powers quickly abandoned the gold standard and adopted a fiat currency. This integrated the extension of credit into the US economy, and forced the relaxation of financial regulations[3] creating the demand for increasing ‘offshore’ investments and market control in the Global South (McMichael, 2016).

The Earthquake Moves North

For their part, workers in the first world were submerged into the process of Globalization. During the post-World War “Development Project” period, workers in the Global North occupied a relatively privileged position in terms of security and reciprocity within capitalist production. However, the post-1980’s move away from industrial Fordism and towards a Global Division of Labor, as well as the need for new methods of financing increasingly complex debt schemes, led to a collapse of the Fordist social contract and the (admittedly inconsistent) implementation of neoliberalism in the Global North.[4]

While directly taxing American, Canadian, or European workers for international projects would have generated outrage, policymakers instead made workers in the Global North and Global South subsidize arrangements like the North American Free Trade Agreement (NAFTA) through limited supplies of jobs and depressed wages, indirectly supporting the growth of transnational imperial capital and pitting workers in the Global North against more “competitive”, low-wage workers in the Global South (Workman, 2011). One way this was done was thorough the devaluing the US dollar, which was key to the initial repression of wages and increasing the US dollar’s liquidity and allowing it to remain an almost universal equivalent (Gill and Law, 1988).

Source: Bloomberg, “Free Trade Feud” at http://www.bloombergview.com/quicktake/free-trade

Conclusion

Because this two-pronged, lucrative opportunity for profit-making; the depression of wages for the domestic working class and the increasingly dispossessed Global South, there is little motivation to repair the increasing indebtedness this whole process bequeaths. In fact, what we witness is the normalization of debt crises as early as the late 90’s (Strange 1998), with similar decisions being made during crises of the late 2000’s (McMichael, 2016). With the exception of some resistance from both the left and right, what we see is an expansion of deficits and the subsidizing of privatization as capitalists demand more and more kickback for volatile schemes that threaten the security of workers and keep the colonized nations of the world in a global prison-house of finance.

The relentless drive for solvency and profitability has undermined sovereignty of the modern state and has led to increasing instability. The pursuit of more and more profit maximization by transnational, imperialist capitalist class has even undermined the stability of capitalism itself (Workman, 2011). What we call Globalization is more accurately Americanization and neoliberal imperialism.

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References:

[1] McMichael, P. Development and Social Change (6th ed.). Sage Publishing, 2016.

[2] Strange, S. “The New World of Debt.” New Left Review.  I/230 July-August, 1998. Retrieved from: (https://newleftreview.org/I/230/susan-strange-the-new-world-of-debt)

[3] Gill, S. &  David Law. “Money, Finance, and Macroeconomic Relations” in The Global Political Economy p. 159-189. (Baltimore: John Hopkins Press), 1988

[4] Workman, T. “The Neo-Liberal Rollback in Historical Perspective” in Working in a Global Era p. 37-67. ed. Vivian Shalla. (Toronto: Canadian Scholars Press), 2011.

 

Categories
AFRICA ANTHROPOLOGY ANTI-IMPERIALISM EMPIRE GLOBALIZATION IMPERIAL DECLINE LATIN AMERICA NEOLIBERALISM POLITICAL ECONOMY

Political Economy of Eurocentrism: The Post-WW2 “Development Project” As Colonialism

Our understanding of global interactions – economic, political, social, and cultural – are still deeply shaped by the often misunderstood period of economic restructuring between 1945 and 1970. Many questions that plague our modern world – why the US continues to expand militarily, why Haiti is in such dire straits, etc. – can be partially explained by the developments of this period. This piece endeavors to begin an outline and investigation of these developments.

The period from 1945 to 1970 is sometimes called the era of the Bretton-Woods system, but more recently has been referred to as the “Development Project”.  This is the terminology used in McMichael’s work Development and Social Change, where the development of a world economy is described as progressing in three distinct stages; European Colonization, the Development Project, and Globalization. The phrase “Development Project” is apt as it refers to the global focus on the industrialization of newly-independent colonies; industrialization is often understood as development. To this day various international agencies classify countries as “developed” and “developing” (McMichael, 2016).

While each of these stages represent distinct historical developments in global politics and economy, several continuities persist. Indeed, the post-World War “development project” would not have existed without European (and later American and Canadian) imperialism becoming the primary actor in the maintenance of the modern world-system. Likewise, neither would Globalization have become the defining paradigm without the collapse of the Bretton-Woods system as the guarantor of the “Development Project” while still building upon its major institutions, the International Monetary Fund (IMF) and the World Bank.

The wording of “world-system” is important here. A world-system is a political and economic framework which imposes itself as totalizing and universal. Capitalism, and what we call capitalist development, is the first such complete world-system in human history. Its origins lie in colonialism, which both allowed the spread of European capitalism to the Americas, Africa, and Asia, and the exploitation of these continents to further the consolidation of capitalism and capitalist profit-making (O’Brien and Williams “Forging a World Economy”, 2007; McMichael, 2016).

Thus, understanding that the economic eras of capitalism proceed from each other, it can be inferred that the inequalities entrenched under colonization persisted throughout the development model period. In fact, the development model period can be understood as a new era of social and economic imperialism, colonization being the first. Development model period imperialism represented a shift, rather than a transformation, of the colonial project.

Therefore, while the Development Project succeeded in preserving the capitalist world-system, it was a failed to provide adequate restitution and improvement for the peoples of the ‘developing’ world.

Pax Imperialism and the Dollar Dictatorship

Cuba. First demonstration in support of the Revolu
The Cuban 26 July Movement storming Havana, the victorious moment of the Cuban Revolution.

The imperialist countries’ shift from colonization to ‘development’ can be understood as a reaction to three distinct processes threatening the capitalist-world system, (1) the wave of decolonization and nationalism sweeping the Europe’s colonies, (2) the weakening of the European powers by the world wars, and (3) the subsequent emergence of a socialist state (the Soviet Union) as a world power.  In response to these developments, the United States replaced Great Britain as the “center” of this new orientation in the capitalist world-system and financial domination replaced traditional colonialism as the method by which “Center” countries dominated colonized “peripheral” countries.

As much as the Development Project transformed the capitalist world-system away from the colonial model, it also continued colonial policy in two key ways. First, the currency of the leading imperialist power functioned as the stabilizer and equivalent for all exchanges within the world-system. During the Victorian era, the British Pound-Sterling was the universal equivalent in almost all exchanges (O’Brien and Williams, “Pax Britanica” 2007). Under the Bretton-Woods System, the U.S. dollar was made equivalent to gold and thus functioned in the same way as the Pound (Cohen, 2001).

It should be noted that at the time of independence for most former colonies, Europe had extracted vast amounts of wealth which it was not subsequently obliged to repay their now-independent colonies (McMichael, 2016).

So while the Development Project transformed the newly-independent states of the colonized world with an influx of industrial hardware and organization, industrial projects took place unilaterally, under the dictates of U.S. economic security and geopolitical interests. The control of the United States in this arrangement cannot be understated. In effect, Pax Americana replaced Pax Britanica, the period of almost absolute British dominance. This control of the Development Project was so complete that through the Bretton-Woods system, the U.S. congress could use fiscal policy, inflating or deflating the dollar, to influence the outcomes of trades the United States otherwise played no part in (Cohen, 2001; McMichael, 2016). Like how British supremacy created competition between European imperialisms leading up to World War I (O’Brien and Williams “Pax Britanica”, 2007),  the United States’ dominance also led to dissent from Japan and Europe who lamented the rigidity of the dollar-pegged system (Cohen, 2001).

Cold War Containment

bretton-woods-sign
Sign describing the Bretton Woods System

Another factor in these contradictions was location. Both Japan and the European powers bordered socialist states; China and the Eastern Bloc countries respectively. In a strategic compromise, U.S. policymakers allowed developmental models to improve other imperialist states’ position, to the point of destabilizing of the internal U.S. economy (Cohen, 2001). Hence why West Germany was the main beneficiary of the Marshal plan as part of staving off the “Soviet wave” the U.S feared would sweep Europe. The major successes of the Development Project – Japan, Taiwan, South Korea, and Hong Kong – were also strategically located in East Asia (McMichael, 2016) to contain the socialist revolutions in places like China and Vietnam, while opening a proverbial ‘eastern front’ against the USSR.

While the Development Project was framed as an effort based on the nation-state, self-sufficiency in the area of agriculture was completely denied to emerging nation-states. Troubled by the enthusiastic and rapid communization of agriculture in China, development agencies sought to reduce the power of peasants to self-organize in India and countries with large agriculture potential through specialization in crops produced for European and North American consumption (McMichael, 2016). While U.S farmers were encouraged to grow staples like wheat and grains, India was roped into growing commodities for western consumption, making India and other countries in similar arrangements dependent on western markets for basic sustenance. India was also the poster-child of the “green revolution” in agribusiness, which created a market for excess chemical weapons the United States was  looking to reprocess (they became fertilizers). This made India responsible for the immense costs of externalities created by U.S. war activity, including ecological destruction and massive rural decline (McMichael, 2016).

Both these examples from India are demonstrative of wider processes of economic and ecological “Unequal Exchange” which perpetuated the colonial reorganization of the world. It may be easy to explain the unevenness of the world economy and the dependency of the ‘developing’ world on the ‘developed’ as simply the vestiges of colonialism. However, this would ignore the active role which the United States played in perpetuating these uneven arrangements through the Bretton-Woods system, with the consent of the other imperialist countries (and when Bretton-Woods failed to foster favourable arrangements, NATO was always on standby). Thus the problems of the development project were precisely because the objectives of the most powerful actors were the preservation of the capitalist, imperialist world-system.

The Next Phase

Understanding the deeply imperialist elements of the Development Project is essential to understanding what comes next, Globalization. Just as Britain spread ‘civilization’ across the world, facilitating the global colonial supply chain, so too did the United States spread ‘development’ through the IMF and World Bank, leading to our now deeply Americanized period of Globalization; the similarities are stark (O’Brien and Williams, “Pax Britanica”, 2007). If we are to address the contradictions of globalization, we must understand the Development Project’s impacts in shaping the globalized world into one of dependency and renewed imperialism.

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References

Cohen, B. “Bretton-Woods System” Routledge Encyclopedia of International Political Economy. Ed. RJ Barry Jones. Routledge, 2001.

McMichael, P. Development and Social Change (6th ed.). Sage Publishing, 2016.

O’Brien, R. and Marc Williams. “Forging a World Economy, 1400-1800.” Global Political Economy (2nd ed.). p. 43-76. Palgrave/Macmillan, 2007.

O’Brien, R. and Marc Williams. “The Industrial Revolution, Pax Britanica, and Imperialism.” Global Political Economy (2nd ed.). p. 77-105. Palgrave/Macmillan, 2007.