-Caveat Lector- ERIC TOUSSAINT Spectre talks to Eric Toussaint, Belgian author of a new book Your money or your life which describes the way in which powerful states and the multinational corporations based in them use the indebtedness of the developing world to line their own pockets at the expense of the poor, and to reinforce the relations of power that keep the plunder going. One of the issues discussed in your book is the increasing concentration of wealth in fewer and fewer hands. Elsewhere in this issue we mention a UN Human Development Report that makes the same observation. The figure you quote is that in 1996 348 people owned a total of one thousand billion dollars; by the following year you needed only 225 to put the same figure together. At the same time, of course, poverty rates are increasing almost everywhere. Isn't this process also bad for capitalism? You quote numerous mainstream economists who seem to hold this view. If so, why is it happening? Is it mere greed, or some inherent feature of the system? First we'd better bring the figures up to date, because the very latest report, the one you cite, gives the number needed now as 200. It gets smaller every year. However, to come to your question, if there was a sort of world government capable of defending the general interest of capitalism, this concentration of wealth, which of course translates into a drop in global demand, would be seen as going against that interest. But there is no such government, no central management of the system. On the contrary, capitalism is a mode of production which is, to some extent, anarchic in its functioning. The fact of global impoverishment poses problems for the rate of growth by putting a brake on the realisation of the value of the sum of goods produced, but this does not stop each capitalist from pursuing his or her own immediate interests, which include the reduction of wages. The result is that each individual capitalist contributes to this impoverishment. In addition, the capitalist seeks advantage in the competition with others, and this can lead to concentration of ownership, hostile takeovers and so on. The resulting oligopoly - the domination of the market by a few firms - can also be against the general interest of capitalism, reducing, for example, the capacity for technical innovation. So, your question touches on one of the system's great contradictions, between the interests of each individual and the general interests of capital. 25 years ago capitalism seemed far less ideologically monolithic than is now the case. How can we explain the triumph of neoliberalism, its absolutely dominant position in mainstream political and economic thought? Since the turning point in the system around the early 1970s we have seen an enormous offensive from capital. It is on the back of this that the neoliberal idea came to dominate. Earlier there were different schools, but now if you call yourself a Keynesian you're considered almost a revolutionary, you're marginalised. This neoliberal school existed long before this - earlier in the century, in the 'teens and 'twenties. It was eclipsed during the Great Depression, when interventionism came back into fashion. Even if the neoliberals were isolated, however, thinkers like Hayek and Friedman, the University of Chicago people and the Montpelerin Society, continued their work in preparation for the counter-offensive. With the reversals of the 1970s, and above all the victories of Thatcher and Reagan, neoliberalism made its comeback. Now, however, it's entering a new crisis, because the economic model which it advocates is itself in crisis. The rate of growth in the industrialised countries remains very low, and the South East Asian countries which are supposed to be its big success are experiencing huge problems. In three great regions of the world where we had been told that the neoliberal model has triumphed - Latin America, Central and Eastern Europe, and South East Asia - we have witnessed crises of the system. Public opinion is increasingly calling into question the model and the tenets upon which it's based - for example, the idea that private enterprises are necessarily more efficient than those in public ownership. All these privatisations have shown this to be untrue, while it is also evident that privatised concerns have lost any commitment to public service. People see the need for renewed regulation by the state. We've seen such economic instability, the growth of speculation, the collapse of a number of important finance houses. Moreover, in this last case governments have intervened to prevent an individual instance of instability mutating into a full-scale systemic crisis - an example was when the US central bank, the Federal Reserve, used direct, authoritarian methods to rescue the hedge fund Long Term Capital Management. A true neoliberal would have said, let it go bankrupt, the state should not intervene, the market must decide who sinks and who swims. A lot of people began to think, well, these people don't respect their own principles, and if they don't respect them when it comes to rescuing rich investors why not drop them when it's a matter of the common interest, of the good of humanity? The result is that a growing section of the world's population is returning to the view that the fundamental elements of life - water, air, the general environment, the food supply - are public goods, not private goods. They are blaming privatisation, deregulation and so on for mad cow disease, for the dioxin scandal, for all kinds of environmental degradation, for exposing us to the dangers of genetic manipulation of foodstuffs. More people are convinced that the general interest would best be served by such matters as water distribution being brought into public ownership, or that public bodies should regulate the distribution of food. This represents the return of a socialist way of looking at things, even if the term 'socialist' remains discredited in many people's eyes by the experience of Stalinism in the east and social democracy in the west. As recent elections have shown, people look at Schroder or Blair and they're not too happy with what they see. A major theme of your book, and of your broader political work, is the problem of Third World countries' indebtedness. Is it possible for you to summarise the reasons why most African countries and many poorer countries elsewhere came to be burdened by huge unserviceable debts? Poorer countries were encouraged by western banks to borrow money during the 1970s. The present debt crisis, which first blew up in 1982, is due to the combined effects of the sudden increase in interest rates by the US Federal Reserve towards the end of 1979, the fall in export revenues and a halt in further loans from banks. It has been managed by the governments of the North and multilateral financial institutions - the IMF and World Bank - in order to force back into a cycle of dependence those countries of the Third World and Eastern Europe which had succeeded in acquiring a certain level of industrialisation and therefore a measure of financial muscle. As for the least developed countries, their subordination to the interests of the leading industrial powers has been enhanced. Between 1982 and 1998, the countries of the periphery - that's to say those of the Third World and Central and Eastern Europe - repaid more than four times the total sum they had borrowed. Despite this, their total debt grew by precisely the same proportion. International creditors - the IMF, World Bank, the Club of Paris (a grouping of western creditor nations) and the Club of London (made up of western private banks) dictate terms, most importantly in the form of Structural Adjustment programmes (SAPs), which are no more than a tool designed to bring the debtor countries to heel. What are the general effects of this debt burden, on the countries themselves, and internationally? The debt system is an enormous mechanism for transferring the wealth of wage-earners and small producers of the South to the capitalists of both North and South. It isn't only the capitalists of the rich countries which benefit, but privileged elites within the Third World who profit from the impoverishment of their own populations. In 1998 $250 billion was repaid by the Third World countries - this doesn't include the ex-Eastern Bloc - and only $40 billion received in Overseas Development Aid (ODA). Moreover, this transfer of wealth is not only attractive in a direct sense, but because it enhances the domination of the most industrialised nations - the member states of the G7 - over the periphery. In recent years we've seen that, by reinforcing the debt, the G7 countries and the multinational corporations (MNCs) based in them have succeeded in forcing those countries which had created for themselves a certain space for manoeuvre - South Korea, Brazil, Mexico - to accept SAPs dictated by the IMF and World Bank. Behind these SAPs you can clearly see the interests of western multinationals, which have been able, for example, to buy - acquiring it in dribs and drabs - the South Korean corporation Daewoo. The most striking result of the debt, however, is of course the direct impoverishment of huge swathes of the world's people. There is a large number of countries in which more than half the population is living below the level of absolute poverty, defined by the World Bank as $1 a day- But in your book you criticise this definition. Yes, because for example if you go to Brazil, or even a much poorer country such as Senegal, you simply can't survive on $1 a day. If people do survive on such an income, it's because of collective solidarity which doesn't work through cash but through mutual aid, women's domestic labour, things which stand outside the framework of market relations. Some of the effects of this terrible impoverishment were brought out at the recent conference held in Lusaka on the subject of the AIDS pandemic. Life expectancy in certain African countries - Uganda, Tanzania, Rwanda - has fallen in recent times by as much as 12 years. This is directly linked to the debt crisis, by the simple fact that the countries which have suffered most from AIDS have paid out, between them, four times as much in exterior debt repayments as they have been able to spend on addressing the crisis through health education or health care. Most people in these countries have no access to basic health care, yet the debt must be repaid. It's significant, too, that no G7 minister was present at this conference. When the G7 met earlier this year in Cologne and was presented with a petition of six million signatures organised by the debt relief campaign Jubilee 2000 with the support of celebrities like the rock singer Bono, they had to come up with some response. Then of course the media's attention moves on and, when it comes to proposing concrete measures, these heads of state are nowhere to be found. In the short term, what can or should be done? The debts must be annulled. In order to achieve that, however, we would have to create very different relations of forces than exist today. It wouldn't be hard to annul Third World debts, actually, because they represent only a small proportion of the world's total public external debt - about $2,000 billion, compared to around $6,000 billion, for example, for the EU's member states - so, if you add the US and Japan, you can see that Third World debts could be annulled without its posing any threat to the world's financial system. But, for the reasons I gave in answer to your previous question, it isn't going to happen. It's only by challenging the existing arrangements of power that things will be changed - by a political struggle. Every time there is a crisis in a developing country, such as that in East Timor now, we in the West are asked by a range of organisations to give as generously as possible. Every time you respond to such appeals, however, you're aware that emergency aid is by definition no solution to the problems that lay behind the crisis, behind all of these crises. What can we in the west do to help people tackle those? Well, the political struggle to which I've just referred needs to be combined with other campaigns, to change the trade relations between North and South to make them more equitable, to establish a new global economic order. Then there is the question of the complicity between the North's financial institutions and the rich elites of the South. For example we need a public inquiry into the location of funds salted away in western banks or stock portfolios by Third World dictators and the capitalists who surround them, and a means of returning these funds, where they are the result of theft, to the peoples from whom they have been stolen. A further issue concerns the necessity for a tax on capital transfers, something like the so-called Tobin tax - not necessarily precisely that, as there are numerous proposals worthy of consideration. A movement, ATTAC, has grown up internationally to campaign for such a tax, though it lacks support in Britain and other English-speaking countries, and is also weak in the Netherlands and, with the exception of Norway, in the Nordic countries. In fact, as this is where most of your readers are to be found, I'd like to appeal to them to get involved. At the moment it's strongest in the Latin countries of Europe, in Japan, and in certain developing countries, notably Brazil. the Philippines and South Korea. As an international campaign ATTAC can play an important role in unifying activists in different kinds of campaigns. The interests of international solidarity groups, feminists, environmentalists, trade unionists, people campaigning against unemployment, are all touched by the failure to tax speculative capital and the resulting instability, the financialisation of the economy. One important matter which ATTAC hasn't taken up, however, is the development of increasingly aggressive military alliances, principally NATO. Yes, the English title of your book hints at the threat of force. We have seen force used recently, and a complete and unilateral redefinition by NATO of its role in the world. Are we facing a growing and real threat of militarism? Elsewhere in this edition of Spectre, for example, Ken Coates says that NATO's attack on Yugoslavia means that nothing will ever be the same again. Well, I don't agree completely with that statement, but I would agree that the recent war reinforced the US position of leadership, its status as principal power at every level - military, economic, political... This habit of military intervention to create or support states resulting from fragmentation of bigger states is leading to the existence of numerous nations whose fragility makes them easy prey for the multilateral financial institutions. For example - and this is what I meant when I said I didn't quite agree with Ken Coates that everything had changed because of this war - look at the way in which the European Union and United States intervened in Bosnia, and I think you'll see that the turning-point was already evident. The Dayton Accords which ended the Bosnian War state, to take one instance, that the president of Bosnia's national bank must be a citizen neither of Bosnia nor of any of its neighbouring countries. The appointee is in fact a western European whose salary is paid by a western multilateral financial institution, the European Bank for Reconstruction and Development. (EBRD). The upshot is that one of the fundamental institutions characterising a sovereign state is in the case of Bosnia completely controlled by external forces. Naturally if foreign powers pay the bank president's salary he or she can only follow the wishes of these powers. So what we're seeing in Kosova was already happening in Bosnia. Apart from this quibble, I agree with the spirit of Ken Coates' remark. Fundamental changes have taken place in the last few years which force us to reassess the question of how to combat these military alliances, force progressive opinion to make this one of our priorities. Not only Kosova, but the Gulf War and armed attacks on Afghanistan and Sudan in 1998, all clearly show that if it believes that its national security interests are threatened, the US will not be restrained by any idea of respect for national sovereignty. On this point, however, I want to make one thing clear, and that is that I do not believe that we should support the creation of a European army or reinforcement of European armed forces to put them on a footing to be deployed anywhere and everywhere in the world. We have to struggle against EU militarism as well as its US counterpart. We should be campaigning for the dissolution of military pacts, a graduated but total demilitarisation, an end to the arms industry, and the development of radical, peaceful solutions to conflicts. One of the central ideas behind Spectre is that, because the same processes are going on in almost every country of the world, a response which attempts to organise across borders and other traditional barriers is imperative. We are opposed to the European Union as standing in the way of such cooperation. There are some, claiming to be of the left, who take a more benign view of the EU, who see it as perhaps reformable. Where do you stand on this question? International cooperation is indeed vital. I am neither 'pro-European' nor nationalist. We need an alternative European project as an element of a new international order, a Europe which admits to an historic debt to the peoples of the periphery, one which would find ways of transferring wealth from rich to poor instead of in the opposite direction. I would like to see a Europe which took sides against existing global power relations, instead of one which seeks to compete for global leadership with Japan and the US. But any such Europe, a people's Europe, would have to ensure maximum autonomy of its constituent peoples, suppressing international frontiers, but not national identities and different cultures. ---- Eric Toussaint is Chair of the Committee for the Abolition of Third World Debt, based in Brussels and known by its French initials, CADTM. If you want to know more about the problem discussed above, buy his book, Your Money or Your Life: The Tyranny of Global Finance (Pluto Press, 322pp, �17.99). He was speaking to Steve McGiffen and Marjorie Tonge. *** GET TO KNOW THE WTO A coalition of North American organisations has brought out an excellent brief guide to the WTO. A Citizen's Guide to the World Trade Organization explains the body's role in the transformation of the globe into a corporate paradise. As the booklet says, "A global system is being created where corporations have all the rights, governments have all the obligations, and democracy is left behind in the dust. Find out why tens of thousands of angry activists will shortly descend on Seattle by sending $3 (from inside the US) or $3.50 (from elsewhere) to Apex Press, Suite 3C, 777 UN Plaza, New York, NY 10017, USA. US residents can pay with money order; others need a credit card. Email [EMAIL PROTECTED] for further details, including reduced rates for multiple orders. *** ANTI-TRADE? The Financial Times, which is the only British mainstream newspaper still worth reading and which should (and usually does) know better, has taken to calling opponents of further global liberalisation 'anti-trade'. Short of producing everything you need yourself, which seems an unlikely achievement, it's hard to see how anyone could really be opposed to trade as such. Caroline Lucas, recently elected British Green Euro-MP, expressed perfectly what WTO-opponents are really against in a letter published by the same newspaper on October 14th. "World trade rules," Dr. Lucas said, "are, in a number of significant ways, damaging the environment, undermining poor people's livelihoods, and setting back animal welfare provisions by decades. World trade rules on production and processing methods are preventing governments from being able to choose between imports which have been produced in socially or environmentally damaging ways, and imports which are being fairly traded. And world trade rules are putting citizens at risk by preventing governments from being able to exercise the precautionary principle when it comes to genetically modified foods or hormone-treated milk." Quite. *** DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! 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