The global political economy of the war

Article published on March 6, 2002
community published
Article published on March 6, 2002

This article has not been vetted by an editor at Paris HQ

I was shocked and appalled by the attacks on the World Trade Centre and the Pentagon

I was shocked and appalled by the attacks on the World Trade Centre and the Pentagon. It was a crime against humanity, and I hope that anyone found responsible who did not die in the attacks will be brought to justice in an appropriate international court. And I can understand why many across the entire USA interpret the attacks as an attack on them: after all, the World Trade Centre is a major tourist attraction in New York, and had they been by chance in New York as tourists or visiting friends on September 11th, they could have died too.

In any case, many of those who support the attacks are perfectly open about making no distinction between US citizens and their government. Since the motive of revenge appears to be sanctioned by all three of the Abrahamic religions, both in scripture and in history, it is not therefore difficult to understand why so many people in the USA along with their kith and kin in Europe and elsewhere should be supporting the present military campaign against bin Laden and his Taliban hosts and protectors. But if civilization means anything, it is founded surely upon reason and common interest, not on revenge and difference.

Take first common interest: I know of no ethical system worth the name that stops short of being universal: alle menschen werden brüder, as Schiller put it, not Aryans or Christians or some other separated part of mankind. And today, more than ever, all peoples are linked together, whether we like it or not, through global markets, overlapping cultures, and a common concern for our increasingly stricken environment. What really concerns me today, however, is reason. In the acres of newsprint from these past weeks, nothing has been more depressing than the widely-expressed view that to exercise reason in relation to the attacks, to explore their causes not just in the minds of the perpetrators, but in the social origins of their ideas and actions, is somehow to condone them.

We who exercise reason are entitled, indeed we are required, to consider whether the behaviour of US and other Western governments, corporations and individuals might have contributed to the social, political and economic conditions in whose context these desperate measures were planned and executed.

Mostly, those who have been exercising reason in this respect have concentrated on the most visible conditions and events of recent decades: the foreign policies of successive US governments which have imposed or propped up regimes favourable to US interests, and undermined or overthrown those perceived as opposed to US interests. Leaving aside earlier numerous adventures, since 1945 US governments have overthrown legitimate governments and/or supported vicious dictatorships in Iran, Guatemala, South Vietnam, Chile, Indonesia, Saudi Arabia, Cambodia and Zaire; and funded terrorists (renamed 'freedom fighters') in Nicaragua, El Salvador, Colombia, Argentina, Angola, Mozambique - and these lists are illustrative, not comprehensive by any means. Closer to home, in the immediate postwar years they deployed covert means to limit the influence of socialists and communists in trades unions and in democratic politics within Western Europe also. And this is without even mentioning the more immediate issues of Palestinian rights, the continued bombing of Iraq, and of course their support for bin Laden and the tribal warlords in their successful efforts to oust the Soviet Union from Afghanistan and install a regime based on a perverted form of Islam.

On top of this, US governments have repeatedly bypassed or ignored the United Nations, which constitutes the only legitimate forum for regulating relations between states. All of this provides sufficient reasons why many, many millions of people all over the world have reason to detest the self-interested foreign policies pursued without exception by all US governments since 1945. But I want to look, not at how US governments exercise their power, but why they have it in the first place.

Why is the world so unequal? Why is the USA so rich, and Afghanistan - along with so many other nations - so desperately poor? And why has this state of affairs persisted, or indeed worsened, over many decades, despite all the apparent efforts of governments and international organizations? What are the economic roots of the present conflict?

We could start this enquiry from the economic events that have followed September 11th. The collapse of airline companies, and the job losses in associated sectors like tourism, are world-wide phenomena that brings home how all parts of the world economy are now so closely interlinked. But these immediate effects are dwarfed by the global economic recession, centred on the information technology and telecommunications industries, that was already upon us long before September: just the latest in the long line of boom-and-bust cycles that have characterised capitalism for several centuries.

Instead, I want to start from Silvio Berlusconi. Of course, he can easily be dismissed as perhaps the second most unsavoury of the new breed of so-called 'post-fascist' politicians in Europe (second, that is, to Jorg Haider). But before he was silenced by more powerful European Union leaders for voicing unacceptable views about Islam, he also placed the anti-globalization protesters, from Seattle to Genoa, in the same political camp as the perpetrators of the September 11th attacks.

Naturally, spokespeople for the anti-globalization movement were horrified by this. If Berlusconi was referring to the acts of mindless violence perpetrated by a tiny minority of protesters (and remember that there is ample evidence from Genoa of the role of agents-provocateurs, as well as unprovoked police violence), then despite the vast gulf that separates their actions from the suicide pilots, they too committed acts that most of us would regard as criminal. But Berlusconi's target was the movement as a whole, not the tiny violent minority: it was the peaceful, decent, largely middle-class campaigners of Jubilee 2000 and Drop the Debt, it was the millions who have supported and continue to support the campaigns of Oxfam, Greenpeace, Friends of the Earth, Save the Children, and all the other non-governmental organizations that fight to wake up the world to economic injustice and environmental catastrophe alike. So why should Berlusconi be opposed to the critics of contemporary globalization? Let us be clear first of all that these critics are not narrow, stay-at-home nationalists opposed to international trade and the global flow of ideas and people: what they oppose is a particular model and regime of globalization. What Berlusconi represents is the conflation of business interests and political power which ensures that today's form of globalization enriches the rich, and further impoverishes and disempowers the poor. Berlusconi presents a particularly blatant form of this, as the owner of a vast business empire that includes much of Italy's mass media, which played a crucial role in bringing him to power - although the Italian electorate and lacklustre opposing political parties cannot be absolved from all responsibility. It is as if Rupert Murdoch was Prime Minister of Britain; and anyone who finds this absurd should reflect on the political influence actually wielded by British press barons in the past century, from Rothermere and Beaverbrook to Maxwell, Black and of course Murdoch himself. But this conflation of business interests and political power is today global in its scope. Consider first the scope and power of business interests in themselves, abstracting from political power. Transnational corporations forty years ago were few in number, almost entirely American, and largely confined to raw materials and mass-production manufacturing industries like oil, chemicals, cars and computers. Today, they dominate every industry in every part of the globe. Not only have they spread in many service sectors like banking and tourism, but after twenty years of global privatizations, they are now a major force in utilities and infrastructure sectors - water, electricity, roads and railways, telecommunications - which were previously either owned by governments, or at least, as in the USA, heavily regulated by them. Here in Britain, we have US-owned TNCs supplying electricity and running prisons, French-owned TNCs running rail franchises; while in turn, British-owned water and telecoms companies have subsidiaries in Argentina or Germany. The sorry, shoddy history of Railtrack in Britain has its parallels all around the world. Intimately linked to the new-style TNCs are the transnational financial institutions - banks, insurance companies, pension fund managers, stockbrokers - and the world's leading stock markets, which supply them with finance and sit in judgement upon the outcomes of their business strategies; and the armies of management consultants, PR agencies, advertisers and business-school educators, who between them create the ideas and the ideologies that promote their activities as the highest form of human endeavour.

But for all the corporate glitz and the PR flannel, this is good old capitalism, writ ever larger and larger. This is production for profit, made by selling everything and everyone that can be sold to anyone who can be persuaded, or is obliged, to buy. The present form of globalization is about finding the cheapest labour force wherever they can, screwing the most out of them, and selling wherever the most revenues can be made. What is bought and sold, under what conditions it is produced, and with what consequences for mankind and nature - well, that depends on what they can get away with. Of course most people working for TNCs and their satellite organizations do not consciously set out to exploit: those without very substantial property are compelled to seek paid employment in order to make a living, and this is as true for a Leeds accountancy graduate as it is for a Dominican seamstress, even if there is little comparison in the living standards and security of the two.

It may be objected that TNCs through their investments bring work and technological improvements to the poorer parts of the world, and that this can eventually assist in the sort of rapid economic development that we saw in the East Asian region in the 1980s and 1990s, or in the formerly communist but now unquestionably misnamed People's Republic of China. True enough, but for many millions of rural peasants and urban wage-labourers, this development has taken place at the expense of an enormous worsening of conditions of life and work, just as happened in this country in the early 19th-century. But why, after all the experiences worldwide of the last two centuries, and with all the wealth and knowledge at humanity's command, should such miseries still be tolerated? The answer, I'm afraid, is that they are tolerated because there are substantial elites, especially but not only in the rich countries of the world, who benefit enormously from global exploitation - and ensure that enough of the rest of us benefit also, so that we can live with the consequences for those that do not. If the business economics of global inequality are pretty clear, the politics are less so, especially since our political system, in the rich democracies, is based on the principles of juridical and electoral equality among the citizens of each sovereign state. But it was only in the last century, and as the result of many decades of political struggle by and for the disenfranchised, that the propertyless achieved rights as citizens; and since the rights of private property remain largely intact and take precedence over political rights, the result remains a flawed democracy in which the wealthy retain the capacity to set the political agenda, buy political influence, and achieve outcomes that secure their own position. In the world at large, political ideals of freedom and democracy fuelled two centuries of struggle against colonial rule by the European powers, and created eventually a structure of transnational governance - the United Nations system - in which right, not might, was supposed to prevail. But even that system reserves extra rights for the richest and most powerful states, through the Security Council. Other vital elements of the inter-state order, like the tripod of economic governance made up of the International Monetary Fund, the World Bank and the World Trade Organization, still enshrine overtly or covertly a much more unequal distribution of state power. In the last twenty-odd years, these institutions have presided over the widening and deepening of capitalist globalization, entrenching the power of transnational business. They have done this partly by using the leverage of credit: governments that incur foreign debts are required, as the condition of support, to adopt policies laid down by the IMF and the World Bank which open up their economies to the unequal competition of TNCs, and require the transfer of productive activities into private hands. The WTO, and its predecessor organization the General Agreement on Tariffs and Trade, have blatantly discriminated in favour of rich countries, allowing them to protect their agriculture and their manufacturing, while demanding free access to the markets and resources of poor nations. The consequences of this for the politics of the less-developed countries have been enormous. Postcolonial states in Africa and Asia, after several decades (or less) of optimism about economic progress, and with the exception of a favoured few, have been dragged down into debt dependency, and find that the only type of development now permitted is one based on a particular Anglo-Saxon type of so-called free market capitalism. The capacity of these states to exercise public initiative has been tightly restricted, in favour of the emergence of local capitalist classes acting as junior partners to transnational business. The steady decline in public service provision encourages the educated to emigrate to the rich countries, which do not hesitate to take full advantage of this brain drain, regardless of its impact on their homelands. The unequal distribution of the gains from growth back home ensures an unending supply of cheap labour, whether as unskilled workers at the bottom of the commodity chains that lead from Asian sweatshop to British shopping mall, or as domestic servants to the new urban elites. For make no mistake about it: the business and political elites of Asia, Africa, Latin America, and of course now the former communist countries, are in general actively complicit in the new world economic order. Of course, the modalities of political subordination in rich and poor countries alike are many and vary through time and across space. There are many countries which continue to dispense with any of the formalities of democracy - like Saudi Arabia. There are others where particular regimes are able to ensure their re-election for decades on end by repressing political opposition, like Mexico under 70 years of PRI government, or Singapore or Malaysia. In some parts of the world - Latin America, the former Soviet bloc, South Africa, Indonesia, the Philippines, South Korea - electoral democracy has replaced dictatorship, but after the initial enthusiasm, it seems to make less and less difference who wins office. North and south, east and west, a common feature is the dumbing-down of politics, and the reduction of democracy to an electoral process, which in both form and content resembles a brainless beauty contest or TV quiz show than any sort of real engagement of the citizenry in political decision-making. The result is a sort of political exclusion that matches and confirms the social and economic exclusion suffered by so many millions. Now, however, Tony Blair has stated that his mission is not simply to capture and punish the terrorists responsible for September 11th, but to tackle the economic and social conditions of the world's poor countries - in short, to eradicate underdevelopment. Let us not be cynical about this. Let us take him at his word.

And let him, in turn, listen a very great deal less to the financiers and the arms-dealers and all the forces of today's economic imperialism, and listen a great deal more to the voices that have been exposing these very people as the fundamental source of the world's present miseries.