[this is chapter 3 of John Bunzl's forthcoming book, "The Simultaneous
Policy - An Insider's Guide to Saving Humanity and the Planet" ]
Insofar as global free markets reign supreme the world remains in chaos.
However, it should be remembered that it was our political leaders who
deliberately de-regulated markets in the first place. That they did so is
therefore somewhat irrelevant to 'where the world is at' in terms of its
community development or its collective conscience. For even though the
increasingly competitive international economy exacerbates our two world
problems, that is something quite different to what people think or feel. It
is, I believe, true to speak of a strong undercurrent of world consciousness
and community development, both of which become more visible if we tap into
the undercurrents of world history.
One could briefly trace the stages of development of world community as they
relate to the community-building process as follows:
Pseudocommunity
This could encompass the period prior to the formation of nation states. No
doubt it was also a period of much chaos. However in world terms that chaos
was insignificant in that wars or man's impact on his environment or his
level of economic development were largely locally confined and therefore
limited and fragmented in impact.
As nation states gradually formed into the patchwork we are more familiar
with, we can see how this patchwork had dramatic effects both between states
and upon the populations within them:
"In the seventeenth century the modern states system was created and
mutually recognised by its members. Central to that recognition was that
each state was the sole political authority with exclusive possession of a
defined territory. The 'state' became the dominant form of government,
accepting no other agency as rival. The Middle Ages had known no such
singular relationship between authority and territory. ...
The modern state did not acquire its monopoly of governance by its own
internal efforts alone. After the Treaty of Westphalia in 1648 governments
ceased to support co-religionists in conflict with their own states. The
mutual recognition by states of each other's sovereignty in the most
important contemporary matter, religious belief, meant that states were
willing to forgo certain political objectives in return for internal control
and stability. ...Thus to a significant degree the capacity for sovereignty
came from without, through agreements between states in the newly emerging
society of states."1
Expressed in terms of a community-building process, we could thus identify
the entity of the nation state as representing the equivalent of the
individual person: the prime agent through which community or chaos in the
world will ultimately be defined.
Chaos
Since the birth of the society of states in the seventeenth century, their
development has been a gradual evolution of individual national identities.
Having secured internal control over their respective populations, nation
states then sought first to develop and then to externalise that identity by
attempting to exert control and domination over other states mainly through
war. Thus the era (or stage) of chaos commenced and evolved through regular
wars between European states as well as during the subsequent colonisation
process in other continents.
This era of chaos equates to what M. Scott Peck identifies as the
competitive urge to heal and convert in the community-building process.
Whilst the notion of healing and converting may have been far from the minds
of those waging war or plundering colonies, the underlying spiritual
motivation was nevertheless the same: a desire, belief or prejudice in
favour of the supremacy of the aggressor's particular national (i.e. self)
identity. For many decades such wars were embarked upon regularly and
seemingly without a moment's hesitation, however, as time passed, diplomacy
played an increasingly important role reflecting a gradual move towards the
possibility of negotiation as an alternative and preferable means to
resolving conflict. As war gave way to diplomacy, so war and colonisation
gave way to economic exploitation as a less overtly violent means of
domination.
To the extent that the current world order is today primarily dictated by
the triad of northern nations consisting of the USA, EU and Japan amongst
whom the risk of war has receded to the point of insignificance it could
perhaps be said that the era of world chaos was drawing to a close with the
end of the Cold War in 1989. The necessity of its closing became all the
more obvious by the futility (and loss) of the Vietnam War by the world's
strongest military power: the United States. By way of further confirmation,
it is perhaps no coincidence that conflicts such as Apartheid in South
Africa which, had it occurred in an earlier era, would most likely have
resulted in mass loss of life, were in the end settled largely peacefully.
Naturally, this does not mean that war is over altogether - regrettably far
from it. But somehow, from a northern triad perspective, violent conflict
that does occur, be it the invasion of Kuwait by Iraq or the ethnic
cleansing of the Balkans, seems today to be completely out of step or
anachronistic to us. Even the most deeply endemic historical conflicts such
as Northern Ireland or the Middle East seem to be slowly succumbing to the
realisation that the era of violent chaos is drawing to a close and that the
era of emptiness beckons. An important early symbol calling for the closure
of the period of chaos was perhaps the founding of the United Nations at the
end of World War II.
I believe it is generally true to say, therefore, that the evolving
undercurrent of world community development is at a spiritual watershed
hovering uncertainly between chaos and emptiness. The concept of mass loss
of life and destruction has become largely unthinkable and unacceptable to
the northern dominated world order and the great ideological struggles to
achieve broad acceptance in principle (if not in practice) of racial, sexual
and religious respect and tolerance as well as the paramount importance of
peace, democracy and human rights are now over.
Emptiness or More Chaos?
What might have been an opportunity to move more decisively into the era of
emptiness was perhaps missed in the 1970s. The decade, whilst heralding the
"dawning of the age of Aquarius"2, represented something of a cultural and
spiritual vacuum having nothing of the energy, style and raw idealism of the
1960s and it failed to offer anything of substance in replacement. This
colluded with the arms race and the Cold War to freeze the further evolution
of world community development. Public awareness of environmental issues had
not yet taken root despite dramatic post-war economic growth, rapidly
increasing resource use and growing evidence of pollution. Similarly, the
preoccupation of northern advanced countries with the more immediate threat
posed by the arms race served to distract public attention from the
suffering of poorer southern nations. As the burgeoning economic expansion
of the 1960s gave way to recessions in the 1970s, a vacuum in economic
ideology also developed leaving some economists - the emerging gurus of the
post-war elite - only too ready to offer prescriptions.
It was against this backdrop of '70s cultural doldrum and economic vacuum
that the ideology of global free markets found fertile ground in which to
germinate and take root.3 Instead of listening to the voices of those such
as Fritz Schumacher, (articulated in Small is Beautiful which remains as
valid today as it was when published in 1974), neo-liberal economists had by
the early 1980s offered world leaders an entirely more glamorous and grander
vision.
The Golden Merry-go-Round
And so it was, once upon a time, that the children who should lead the world
were brought to a beautiful fair ground. In it stood just one single yet
enormous ride, the size and beauty of which they had never witnessed before:
the golden merry-go-round. The outside was painted in the most wondrous
colours and decorated in multi-coloured fairy lights. Strings of gold coins
hung from the ceiling and they tinkled and jangled around the heads of the
horses. The inner core was made of pure gold and incorporated a grand
accordion from which emanated the intoxicating chimes telling of a glorious
ride to global prosperity.
Being an insider's guide, the reader is spared repetition of the detailed
consequences wrought on nations of all types by global free markets. The
analogy of a merry-go-round is appropriate because, as it spins ever faster,
it exemplifies the centrifugal force that weighs heavier the further from
the core one sits. The advanced countries, of course, sit nearest the core
shielded from the worst effects whilst benefiting from the more harmful
effects on others. Developing countries, on the other hand, sit on the outer
horses, struggling to hang on. The countries are locked in competition with
one another to sit on the horses nearest the centre. Countries that have
suffered in one way or another spring instantly to mind: Britain, Sweden,
New Zealand, Mexico, the south east Asian 'Tigers', Brazil. Where next? And
this is to say nothing of the non-industrialised countries who, starved of
capital, are left to the real misery and chaos of rebel warfare, famine,
poverty and spiraling numbers of refugees.
Whilst the world becomes ever more spiritually ready to take the crucial
step into an era of emptiness in which the exclusion of less industrialised
and non-industrialised countries as well as problems within advanced
countries might be addressed, it instead finds itself caught in the grip of
a new form of economic chaos, the full consequences of which are yet to be
fully realised. Realisation is particularly lacking in those advanced
countries situated at the core of the merry-go-round where its centrifugal
force is less powerful. Developing nations on the periphery, however, such
as Mexico or Brazil, are coming to realise the consequences of chaos more
clearly.4 Addicted as they are to the drip feed of dependency-inducing
foreign debt administered by the "West knows best" doctors at the World Bank
and the IMF, it remains unclear whether even they can ever free themselves
from the vicious threat of the wrecking ball5.A growing chorus of calls
amongst some economic experts for re-regulation of free markets can now be
heard for what would be an attempt to 'cool the casino'6. Whether such calls
can ultimately overwhelm the neo-liberalist free market fundamentalists
remains to be seen. If they succeed, increased control of the international
economy will provide some measure of relief. However, it will do little to
ameliorate the dire human and social consequences of mass unemployment
wrought by ever more rapid technological change driven by computerisation
particularly in robotics and in many service sector functions. This all the
more so under the tutelage of a financial system that ensures that only the
rich get richer. These dire effects will, however, not be confined to the
poor nations of the south. Incontrovertible evidence of unraveling social
cohesion within advanced northern societies is already becoming hard for
policy makers to ignore.
Global Market "Dictatorship"
There are two central but inter-linked problems this book seeks to address.
Firstly, that unregulated global capital markets represent a supra-national
power that subtly but effectively regulates the economic policies of
national governments: a situation that has engendered political and economic
paralysis from which we cannot ordinarily escape. A global regulatory
framework for capital markets is therefore essential. Secondly, that the
social and environmental consequences of leaving transnational corporations
(TNCs) to exploit national governments against the back-drop of that
paralysis can only accelerate both the growing division between rich and
poor as well as the continued degradation of the environment. Whilst a
regulatory framework is doubtless essential, the main factor working against
it is competition: competition between nation states and competition between
TNCs. In analysing these problems, we can see how the forces of competition
are coming to represent the core barrier to creating that framework.
Taking the first of these problems, the unpredictability and volatility of
world markets itself acts as a severe constraint upon the freedom of action
of the nation state:
"...governments often cannot know whether the response of world markets to
their policies will be merely to make them costly or to render them
completely unworkable. Governments are in a situation in which even the span
of options that is available to them is uncertain. This continuing radical
uncertainty is the most disabling constraint on the power of sovereign
states."7
"The policy options open to nation-states in the 1990s are not delivered to
them as a menu with fixed prices. The governments of sovereign states do not
know in advance how markets will react. There are few, if any, rules of
monetary or fiscal rectitude whose violation will result in predictable
penalties. At the margin, no doubt, policies that are ultra-risky in terms
of inflation or government debt, say, will be punished by watchful bond
markets; but the scale of severity of such market responses cannot be known
in advance. National governments in the 1990s are flying blind."7
The inherent uncertainty of international de-regulated capital markets tends
to engineer a kind of paralysis of national economic policy ensuring
governments' adherence only to policies they can be sure will not displease
world markets. These are necessarily free-market policies characterised by
weak environmental and labour regulations: policies which serve only to
intensify the very serious social, economic and environmental problems the
world now faces. For politicians to risk venturing beyond the narrow policy
parameters acceptable to capital markets would likely result in capital
flight with its attendant consequences of devaluation, inflation and
unemployment: a venture only the politically suicidal could contemplate.
Today, the pursuit of national economic success is no longer an absolute but
a relative undertaking. The effectiveness of a government's policy upon its
nation is now largely determined by economic, social, taxation and other
conditions prevailing in other neighbouring or competing nations. The
constraints imposed by the ability of capital to cross borders at will,
combined with the ability of corporations to move production and therefore
employment to lower cost countries, thus abandons nation states to a
competitive struggle to attract capital and maintain employment - and
therefore votes. In the absence of any significant international control
over world markets, the economic role of government is thus confined to the
relentless pursuit only of those policies which both garner market approval
and favour business in an effort to maintain national competitiveness
against other nations:
"In this new rivalry American free markets work to undercut both European
and Asian social market economics. This is despite the fact that the social
costs of business are borne in different ways in European and Asian social
markets. Both are threatened by the American model because each business
bears social obligations that in the United States it has shed. At the same
time Chinese capitalism is emerging as a rival to the American version
because it can go further than the American free market in undercutting
social markets in Europe and the rest of Asia.
All the familiar models of market institutions are mutating as global
competition is played out through the structures of sovereign states. It is
a basic error to think that this is a contest that any of the existing
models can win."8
"A global free market works to set sovereign states against one another in
geo-political struggles for dwindling natural resources. The effect of a
laissez-faire philosophy which condemns state intervention in the economy is
to impel states to become rivals for control of resources that no
institution has any responsibility for conserving. Nor, evidently, does a
world economy that is organized as a global free market meet the universal
human need for security. A regime of global laissez-faire that prevents
governments form discharging this protective role is creating the conditions
for still greater political, and economic, instability." 8
Unlike previous experiments when free markets were of a scale that allowed
their re-regulation, the present scale, reach and mobility of international
trade and capital markets puts them beyond national re-regulation. For if
any nation or group of nations were to attempt it, capital would flee those
countries causing currency devaluation and higher inflation, if not outright
economic collapse. Furthermore, in moving elsewhere, the markets would only
carry on as before. Global capital markets are therefore beyond the control
of individual or even groups of nations. To the extent that politicians
today are able neither to flout the narrow parameters global markets dictate
nor to re-regulate them, they are effectively subject to a supra-national
power or, one might even say, to a quasi-dictatorship. This is the critical
point we must now recognise. The policies subtly but effectively imposed by
global free markets and international competition thus become irreversible
as John Gray points out, taking New Zealand as an example:
"Most decisively, the restructuring of New Zealand's economy which opened it
to unregulated capital flows conferred on transnational capital an effective
veto power over public policy. Wherever public policies might be perceived
as impacting upon competitiveness, profits and economic stability they could
be quashed by the threat of capital flight. Neo-liberal reforms thereby
became politically irreversible."8
Hans-Peter Martin and Harald Schumann also graphically describe the
difficulties the nation state faces in exerting any kind of influence or
control. In this instance they refer to the "Tobin Tax" which proposes a 1%
tax on all currency dealing transactions in order to throw a little 'sand in
the wheels' of global currency speculation:
"Theoretically and politically, there has for years been no argument against
Tobin's proposal that is worth taking seriously. Indeed, it 'cannot be
faulted theoretically,' in the view of Hans-Helmut Kotz, chief economist at
Germany's Girozentrale, the central national savings institution. But the
simple scheme obviously has one drawback: those who would be affected by it
are resolutely opposed and, as in the case of ordinary taxes, they play off
the nations of the world against one another. Kotz: 'New York and London
will always block it.' But if just one major financial centre were free of
the tax, the currency trade would gravitate there. And even if the G-7
countries all introduced a Tobin tax, the financial sector could formally
switch its business to offshore branches from the Cayman Islands to
Singapore and so undermine the intended restricting effect. Failure is
therefore 'programmed into' such a tax on currency transactions, an
economist at the Deutsche Bank cheerfully predicts. One of his American
colleagues dotted the 'i's' on the threat. If the state starts interfering
in the trade, 'we'll eventually be financial organizations headquartered on
a ship floating mid-ocean'".9
In the face of such threats, our political leaders throw their hands up in
helplessness and inaction:
"Tobin's proposal is 'no longer applicable today,' State Secretary Jurgen
Stark says to justify the fiscal inaction against speculators. It would work
only 'if it was [introduced] by all 190 countries in the world.'"10
Some argue that nation states still have options to control capital flows
and thus to protect their economies citing Malaysia or Chile as examples.
But I suggest that these exceptions merely serve to prove the rule. After
all, those countries only imposed capital controls when faced with the
direct threat of imminent economic crisis such as the South American or
South-East Asian crises and therefore had little to lose by taking that
action. Those circumstances can hardly be compared to the economies of the
major industrialised countries who face, and are unlikely ever to face, any
such threat. Indeed, it is highly questionable whether even the G-7
countries acting together could risk contemplating such action for fear of
capital fleeing to Hong Kong, Zurich or other financial centres. It is
therefore necessary, I believe, to face the reality that, by and large,
capital controls can be imposed only in the exceptional case when the
consequences of imminent economic crisis effectively mean the country
concerned has less to lose by imposing such controls than by not doing so:
i.e. when it is the lesser of two evils. Barring a financial crisis of truly
global proportions, such a situation is unlikely ever to arise for the G-7.
Pseudo-Democracy supplants Democracy
As international competition gradually intensifies, the overall effect is
becoming increasingly clear: that the constraints on policy imposed by
de-regulated global financial markets and TNCs combined with governments'
inability to re-regulate them mean that our political leaders have
unwittingly yet irrevocably sacrificed not only their power to influence the
economy but the very quality of democracy itself. For not only are global
markets unilaterally uncontrollable, governments are forced to adhere to the
narrow span of policy options the markets dictate:
"...recent experiences in many countries show that there are no substantial
differences in the policies towards finance capital whether the governments
in power are left or right." 11
Since the pursuit of national economic success is now a relative
undertaking, policies involving higher taxation and public spending or
measures that seek to protect the environment thus increasing the costs of
industry have consequently become substantially unworkable:
"...the ups and downs of freely convertible currencies reflect the
expectations of future growth and competitiveness that investors entertain
about the respective economies. In a way, a country's whole economy thus
becomes a commodity, whose relative value crystallizes through the return
envisaged by investment fund managers. This gives the finance markets great
power vis-�-vis economically weak countries, so great that the fluctuations
in the exchange rate can decide the fate of whole nations. Governments,
whether democratic or authoritarian, often find themselves compelled to gear
their economic, social and fiscal policies to the interests of investors,
with the result that the interest of their own people in social and economic
security all too easily goes by the board."12
"The effect of competition from countries in which a regime of
deregulation, low taxes and a shrinking welfare state has been imposed is to
force downwards harmonization of policies on states which retain social
market economies. ... The workings of the global bond markets reduce or
remove from the world's social markets much of the freedom their governments
had in the past to pursue counter-cyclical policies. They force them to
return to a pre-Keynsian situation in which they have few effective levers
of macroeconomic management. ...
Global capital markets...make social democracy unviable."13
By their inability to deviate from these policy constraints, governments of
whatever party and their electorates must now submit to what are,
effectively, permanent political conditions. Conditions in which whatever
party we elect, the policies we receive inevitably conform to market and
corporate demands and not necessarily to what the electorate desires.
Certainly electorates around the world still generally believe they live in
truly democratic countries, a misaprehension which is leading to a marked
and increasing mis-match between voter expectations and political-economic
reality. Voters are led to believe that in selecting a particular party they
are voting for a particular political approach. But they become confused
when, once in power, their party fails to deliver what they might have
expected. This mis-match is proving problematic particularly for political
parties on the centre-left. Once they gain power, their traditional
supporters, particularly trade unions, are left scratching their heads,
failing to understand why their party, now in power, seems curiously
reluctant to implement its traditional policies or to listen seriously to
their needs:
"The macroeconomic climate has been as inhospitable to unions as the
microeconomy of individual firms. Widespread government deregulation in the
1980s, combined with high levels of government debt in the 1990s, increased
governments' reliance on international financial markets and gave those
markets increased leverage over the economic policies adopted by individual
nations. But global financial markets tend to shy away from precisely the
kinds of policies that unions have traditionally advocated - full
employment, high growth, and a tendency to lower interest rates and
increased public spending when employment rates flag. The threat of capital
flight (and the ensuing currency devaluations and higher inflation) and the
desire to attract international capital to finance deficits and spur
economic growth have prompted even center-left governments to turn a deaf
ear to union preferences."14
This explains why, at a time when the gap between rich and poor is perhaps
at its greatest, when job security at its weakest and when the political
left around the world should consequently be at the peak of its
effectiveness, it instead finds itself effectively neutered by the political
effects of global free markets and international competition. Far from being
at its peak, therefore, the traditional left is instead struggling to find a
role for itself in a political-economic environment in which its traditional
policies have become impracticable. For any political party, impractical
policies inevitably spell political redundancy and a loss of support. In the
struggle against redundancy therefore, the left has had little option but to
shed those traditional policies; the policies that once defined its
socialist identity - its very ethos. In doing so, the democratic political
choice they represented to the electorate has consequently been permanently
excluded from the political scene. By shedding those policies, traditional
centre-left parties such as Old Labour or its counterparts in other
countries have been forced to re-position themselves (under the cover of
'Third Way' or other appropriate spin) more towards the right: just where
the market determines that they, or any other party seeking power, must be.
In doing so, they have inevitably adopted most of the economic policies
traditionally pursued by centre-right parties. Whilst centre-left parties
have sold their souls by moving to the right, traditional centre-right
parties 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 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."15
Indeed, we should perhaps ask ourselves what is the purpose and function of
centre-right parties when so-called centre-left parties across Europe -
according to market/corporate demands - are successfully delivering
traditional centre-right economic policies in any case?
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 proper 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 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 is 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 therefore 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.
Many advocates of free markets point to the spread or quantity of democracy
that market deregulation has encouraged around the world. This may be so.
However, at the same time, the narrowing of the freedom of action of the
nation state that free markets dictate serves to degrade the quality of
democracy. The will of the people has thus become subordinate to the will of
the markets. Democracy has in fact been reduced to a kind of
pseudo-democracy: one in which the people are duped into thinking they have
a political choice when, in fact, they don't. The traditional view of
democracy led us to believe that different political parties would each
deliver different policies once elected. Under pseudo-democracy, however,
what we inevitably receive are the same free-market, neo-liberal,
business-friendly policies merely 'spun' in different clothing.
Indeed, we must now accept that in the era of globalisation, conventional
party politics, regardless of the party in government, is substantially
unable to deviate from the neo-liberal policies demanded by global markets,
TNCs and competition and the sooner we all wake up to the fact of this
political paralysis and its serious implications the better.
Democracy's rapid spread around the world is perhaps no accident. As the
TNCs spread their activities globally into the developing world, they need
political and social stability to carry on their businesses. With global
financial markets ensuring the establishment of pseudo-democracy in all
so-called democratic countries, the new economic elite consisting of TNCs
and shareholders along with the IMF, World Bank and WTO who support their
agenda, no longer needs to prop up unpopular dictators in order to secure a
stable penetration of developing markets. With electorates around the world
suitably brainwashed by pseudo-democracy into thinking they have a real
choice, the policies the elite require are delivered without the social,
political unrest and instability normally associated with dictators and
military juntas. To look, therefore, to party politics for solutions to
domestic problems (let alone world ones) has become substantially futile.
Let us now turn to the second but related problem of the growing power that
TNCs are able to wield against a backdrop of market-induced government
impotence. There can be little doubt that major corporations, and in
particular transnational corporations, constitute the main force in the
global economy for goods and services and are consequently responsible for
much of the physical effects that economic activity has on the environment.
"The corporations control 'between a quarter and a third of all world
production and are particularly active in processing and marketing',
according to the Brandt Report in 1980: 'The marketing, processing or
production of several commodities - including bauxite, copper, iron ore,
nickel, lead, zinc, tin, tobacco, bananas and tea - is dominated in each
case by a small number of transnational corporations.' The extent of their
activities has since become much higher. It is common for a small number of
TNCs to account for over 80 per cent of the trade in agricultural
products... . 'Outside the primary sector, upwards of two thirds of the
world's exports of goods and services are accounted for by TNCs; and 30-40
per cent of these take place within the same institutions.' One estimate
suggests that the biggest 500 TNCs 'control about 70 per cent of world
trade, 80 per cent of foreign investment and about 30 per cent of world
GDP'." 16
Against a background of world markets beyond national control, corporations
operating internationally are ideally placed to take advantage of any
country playing off one against another by exploiting the preoccupation of
every nation with maintaining employment:
"Senior Ford executives yesterday urged the Prime Minister to commit more
state aid to a key British plant to prevent 1,400 jobs being lost. At a
30-minute meeting in Downing Street, the company told Tony Blair that the
�30m in government subsidy...did not match the sums available elsewhere. It
is understood that the German and Spanish governments have indicated that
more generous packages might be available for plants in Cologne and
Valencia. ...
Ken Jackson, the general secretary of the Amalgamated Engineering and
Electrical Union, expressed confidence that the Government and the company
would arrive at a deal: 'Bridgend is a productive plant with an excellent,
highly skilled workforce. I'm sure the investment needed to produce the new
engine will be secured,' he said. ...
A Ford spokesman said yesterday's talks ... were the kind which took place
in every country Ford was involved in."17
In exploiting national governments in this way, TNCs can both obtain free
government subsidies at tax payers' expense and can, either directly or
through the auspices of the World Trade Organisation, deter or prevent
governments from imposing stricter employment conditions or environmental
regulations thus securing ever-higher profits for their shareholders. They
can also draw trade unions in to playing their game which unions willingly
do, if somewhat uneasily, in order to safeguard their members' interests.
This adds a false but compelling air of legitimacy to the case put by the
corporations. With governments fearing a loss of votes, unions fearing a
loss of membership and employees fearing for their continued employment it
all amounts to a neat trick that governments of whatever party can ill
afford to question for fear of the corporation concerned moving production
elsewhere. Their willingness to acquiesce in this game is understandable,
for with other nations only too ready to welcome any corporation ready to
set up a new factory, not to play would be self-defeating and would lay
governments open to the charge of not acting in the "national interest".
Political Leaders
And so we see how our political leaders who are commonly regarded as being
in a position of power (and doubtless believe themselves to be in control),
are in fact very much guided by, and subject to, global pressures far beyond
their control. Indeed there are severe difficulties for our leaders, for it
is impossible for them to go out on a limb and recognise the needs of the
future any distance beyond what the accepted view of the possibilities are
amongst the people for whose support they are competing. Politics, like
everything else, has become a sort of game with an accepted agenda, a
mainstream agenda, and any attempt to step outside it will result in
marginalisation. Our leaders cannot risk advocating policies or views which
dilute the perception of the national interest in any way. If they did so,
their opponents or the people with the daggers standing behind them are
ready to get rid of them and take their place. As such our leaders are
prisoners within a sort of game that prevents them from giving any radical
lead. This is a critical point we must recognise.18
As has been argued, being subject to the quasi-dictatorial power of global
free markets and the practical imperatives of international competition, the
definition of the "national interest" is necessarily extremely narrow.
Indeed, international financial markets themselves determine and define the
'national interest' as synonymous with any policy likely to result in lower
public spending, lower corporation tax, weaker trade union powers, weaker
environmental regulations, etc. i.e. any policy that improves national
competitiveness. As guardians of the 'national interest', political leaders
of whatever party inevitably remain locked in to that narrow definition,
compelled to pursue its downward spiral with ever-increasing vigour:
"Brown in 'green tax' climbdown. GORDON BROWN will bow to pressure from big
business today by announcing a climbdown over his plans to impose a "green"
tax on industry.
In his pre-Budget statement, the Chancellor will disappoint the
environmental lobby by curbing the climate change levy after lobbying by
Britain's bosses, who warned that it would harm productivity and cost
jobs."19
It is no accident therefore that centre-left, liberal or even Green parties
when they gain power find themselves constrained to pursuing with even more
determination the self-same policies initiated by their centre-right
predecessors. It is therefore not difficult to see why politics has today
become so sterile and uninteresting nor come as any surprise that in the
case of Gerhard Schroeder "it's hard to see any shift from the policies of
Helmut Kohl"20; nor that New Labour's Tony Blair is often described as the
best Conservative Prime Minister since Margaret Thatcher; nor that, in
referring to the new Liberal-Democrat leader Charles Kennedy, the Financial
Times cheerfully points out that:
"..unless he and his party learn to love economic liberalism, he will be the
social democrat grandchild who never left home."21
Once in power, therefore, politicians of whatever party effectively have no
choice but to remain confined within the policy parameters dictated by
global markets and competition. Now subject to pseudo-democracy, the simple
conclusion we must reach is that it no longer matters much for which party
we vote. This predicament and resulting voter ambivalence consequently
presents our political parties with a distinct problem: how to make
themselves and their policies appear different from those of other parties
when in fact the markets allow no such differentiation. How can they
maintain to the electorate the illusion that they have the power to improve
society, or preserve what is best in society, when the markets preclude such
'value judgements'? In a vain and desperate attempt, they are forced to
employ increasingly elaborate rhetorical tricks and stunts commonly known as
'spin'. Hence the rise to prominence of the Spin Doctors.22 For centre-left
governments, attempting to reconcile their traditional social democratic
values with free-market realities is resulting in the most pathetic
exercises in rhetorical hair-splitting in an attempt to distract traditional
left-of-centre supporters from the reality of having to submit to the
liberal economic dictates of world markets:
"French prime minister Lionel Jospin publicly distanced himself from the
'Third Way' politics of the British and German governments in a speech
delivered in La Rochelle last weekend. 'We are not going in for 'social
liberalism',' he promised his audience. 'Our approach is different from our
friends Tony Blair and Gerhard Schroeder. We are a 'left of renewal'
assembled around modern socialism.' "
But as the same article immediately goes on to reveal:
"The prime ministers's comments have been interpreted as an attempt to
soothe France's old Left, which has become increasingly worried by
government attempts to deregulate the economy."23
Since our politicians and their parties must now position themselves
according to what free-market competition dictates and not necessarily to
what the electorate desires they have, to a great extent, ceased to
represent a mechanism through which political choice can be expressed.
Instead they have become merely puppets of the quasi-dictatorship serving
principally to preserve amongst the electorate the false illusion of
political choice; the false illusion of democracy. Indeed, one could say
that, in de-regulating world markets, democracy has been hijacked and
subverted by the quasi-dictatorship of global competition, its prime agents
consisting of global financial markets and transnational corporations and
its instrument of control being the pseudo-democratic illusion of party
politics and the power and threat of competition. But this
quasi-dictatorship is far more threatening than the conventional
dictatorships that we have witnessed throughout history for the simple
reason that it is far more subtle, and worst of all, no one can be said to
be in control of it.
The electorate too, has been infected by this paralysis. Voters are not
stupid. They understand only too well what competition means. After all,
they see it and are subjected to it in their daily working lives. Whilst
they may not be able to precisely identify what is argued here, 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. So it would be wrong to say
that society submits unwillingly to global market quasi-dictatorship. Indeed
society, being infected by competition and tranquilised by pseudo-democracy,
simply fails to see that it has been deprived of any real political choice.
Instead, it is abandoned to the unstable and insecure forces of competition
whilst believing its fate to be inevitable, unavoidable or simply, perhaps,
as just 'a sign of the times'.
And we should not forget the role the media plays in supporting political
paralysis.24 Its dependence on corporate advertising for continued profits
as well as the fact that most of the media is itself owned by transnational
corporations has left particularly those living in the USA with a media wary
of reporting even world events such as the massive protests in Seattle in
December 1999 against the WTO:
"Anyone in the United States who switched on the television in the second
half of Tuesday wondering what was happening in Seattle would have been
little the wiser. The dozens of network and cable stations that have, in the
past, shelved regular programming to show such spectacles as the OJ Simpson
car chase, terrified children running out of Columbine High School, and hour
upon hour of the sea off Martha's Vineyard after the Kennedy plane crash,
offered viewers precisely nothing until yesterday morning. ... Viewers were
given no glimpse of the street demonstrations, and no interviews with either
demonstrators or delegates. ... If the disturbances in Seattle figured at
all, it was in pictureless summaries lower down the bulletin. ... Media
executives declined to discuss events yesterday, but it was hard to escape
the impression that the absence of live coverage was, at least in part, a
result of deliberate editorial judgements."25
So we see how society in general and politicians in particular have become
subverted. We see how politicians, whatever they may say prior to an
election, must, once in power, act substantially in accordance with market
and corporate demands often to the detriment of society and the environment.
Whilst the immediate arguments for complying with those demands may seem
compelling, governments, unions and members of the public alike in whatever
country must wake up and urgently realise that this is a game which all must
ultimately lose. While governments fail to co-operate with one another to
control global markets and corporations, we are all condemned - in whatever
nation we happen to find ourselves - to an on-going and profoundly
un-democratic political and economic paralysis.
Paralysis it may be, but its effects are far from static. Uncontrolled
competition and the world-wide spread of new technology are forces with
their own powerfully negative dynamic. A dynamic which causes governments to
engage not only in a progressive downgrading of social and environmental
regulation in a tit-for-tat international struggle to remain attractive to
transnational corporations and capital markets, but also one which forces
the corporations themselves to compete fiercely against one another for
market share, ever-higher short-term profits and safety from unwelcome
takeovers. In this volatile and highly competitive business environment
characterised by over-saturated markets the simplest way to increase profits
is to cut overheads by externalising (out-sourcing) every possible cost and
by introducing new labour-saving technology to reduce those costs that
remain:
"A further 40,000 jobs could be in immediate danger in the banking industry
because of competition from supermarkets and other newcomers to the
business, according to industry estimates. ... The banking sector has been
hit hard by a series of 'restructuring' exercises - some 150,000 jobs have
been lost over the past seven years - but there is more to come, analysts
believe. ... Mr. Batstone [of NatWest] said that before the late Eighties a
job in banking was seen as a 'job for life', but tougher competition has put
paid to that. Banks wanted to replace staff with technology, he said. ...
Ian Hodges, an analyst at Barclays Stockbrokers, said banks needed to
encourage customers away from branches. He said: 'The challenge of the last
10 years, and perhaps the next 10, is to introduce new technology and reduce
costs without alienating the existing customer base."26
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