-Caveat Lector- The Independent - United Kingdom; Dec 12, 2000 Globalisation: Time to say a daily prayer for the global economy The abstractions of free trade are blinding the world's decision- makers to the reality of imminent environmental collapse, says Andrew Simms BY ANDREW SIMMS (copyright) ON HEARING of the death of one of his critics after a fall while riding, TH Huxley, the advocate of evolutionary theory, said that it was the first time the man's brain had made contact with reality and that the experience had obviously proved fatal. Unfortunately, unless the mandarins of global economic policy experience a reality check, it is the rest of us who are most likely to suffer the pain of their detachment. A basic misunderstanding of our global governors in the IMF, World Trade Organisation and other still-emerging institutions, is to believe that abstract economic theory is more important than the real world. We are supposed to believe that encouraging the unrestricted flow of commodities and money across national borders will meet all our human needs. A commitment to these abstractions still remains the test of good international citizenship for governments. Yet the real world is about to generate what economists call "externalities" on such a huge scale, as a result of the waste from how the world does business, that they will ridicule our faith in the compromised market mechanisms at the centre of our economic system. After the middle of this century the economic cost of global warming stands to surpass the value of total world economic output, according to the best guesses of the insurance industry. Before that, in 25 years time, half of all people living in developing countries will be at risk from unnatural disasters. How we manage and adapt to global warming is going to become the organising principle of the world economy, either through choice or by the climate's imposition. Whatever reduces fossil fuel dependency, or shapes local economies to maximise human resilience in the face of increasingly harsh environments, will become the object of economic policy, instead of maximising crude growth for its own sake. This is bad news for those who believe in the model of growth led by increasing reliance on international trade. On one hand, trade is hooked on ever-stronger fixes of fossil fuels. On the other, as the UN point out, export-led development strategies tend to displace local, community- serving economic activities which are actually frontline coping mechanisms when disaster strikes. Foreign direct investment, the other great economic hope, in practice turns out to be less of an irrigation system for distributing wealth and technology, and more like a vacuum cleaner, sucking up resources to an increasingly bloated wealthy minority. Nor has anyone found an answer to the disastrous long-term decline in primary commodity prices that poor countries rely on. The management of our natural capital base is the precondition for everything else. The reason technocrats are able to avoid the obvious is partly due to the democratic deficit at the heart of the system. Supported by business lobbies that lubricate compliant political parties into power, rich country governments in turn literally pay for votes to run the global economy's key institutions. Those institutions then oversee market-facilitating agreements with teeth, but which are based on economic abstractions. Multilateral environmental and social agreements, based on real ecological and human needs, however, are second-class legal citizens with no significant powers. A study by British campaign groups to reveal where the government gets its understanding of globalisation from, revealed a blind spot where more critical research emerges from UN trade, environment and development agencies. World Bank and IMF sources were much more common. Yet these latter organisations repeatedly reveal their work to be more ideological than pragmatic. Following power struggles that saw progressive voices leaving the Bank, its research department published calculations to demonstrate the universal benefits of conventional growth and trade liberalisation. To demonstrate how flawed the exercise was, researchers based at UNICEF then repeated the calculations using random numbers and came to identical conclusions. The notion that you get rich first so that you can afford to patch-up the environment always had one serious logical flaw. What if you did so much damage getting rich that the environment couldn't be patched up? The Secretary General in-waiting of the WTO recently said that a country's obligations to obey free trade rules came before their duties to international environmental agreements. In saying so he put method before substance - effectively saying that a plate was more important than food. The other flaw in the current globalisation model is that it simply doesn't deliver for the vast majority. They are the people who can't afford its Aids medicines in Africa. Nor material for their flooded homes. No economic theory can allow us to have our planet and eat it. New, inclusive mechanisms are gaining support that deal with the world as it is - not as a bean counters' fantasy landscape. For example, contraction and convergence is based on the undramatic proposal that to manage global warming we need to reduce greenhouse gas emissions. It also proposes that, in a world where the typical US citizen uses 20 times more fossil fuels than an average Indian, or over 300 times someone in Mozambique, we need to share our resources more equally. Carbon trading, as part of the system, could connect to the real world by using a new international currency backed by real resources: fossil fuels, according to economist Richard Douthwaite, instead of our rootless paper and digital currencies. A movement has begun calling for post-autistic economics. Early next year new-money guru David Boyle publishes a book calling for us to be set free from "the tyranny of numbers". If there is a daily prayer for the global economy, it should be "deliver us from the abstraction". Andrew Simms is head of the global economy programme New Economics Foundation and co-author of `Collision Course - Free Trade's Free Ride on the Global Climate' <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. 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