>A colleague of mine just provided me with this article. I thought >his subject heading was appropriate so I will use it.
Brian McAndrews >New York Times > >Wednesday, November 21, 2001 > >Renowned U.S. Economists Denounce Corporate-Led Globalization > >Nobel Prize winner Joseph Stiglitz and internationally acclaimed >economist Paul Krugman decry undemocratic, unsound, and unethical >corporate agenda > >by James L. Phelan > >It seems critics of corporate-led globalization have some new allies. > >Recent Nobel Prize winner Joseph Stiglitz, along with well-known >economist Paul Krugman, have of late made a flurry of public >statements critical of the policies and processes of the World Trade >Organization (WTO), the World Bank / IMF, and the proposed Free >Trade Area of the Americas (FTAA) - while leaving plenty of harsh >words for the blatantly pro-corporate actions of the Bush >Administration. Both economists point to the disruptive and >distorting influence of large corporate entities through their >dominance over both domestic and international institutions. > >Stiglitz and Krugman have begun to voice their indignation more >frequently in the press, raising many of the same concerns that >social justice and environmental advocates have long made about the >disproportionate influence of big business and the hypocrisy of >"free market" dogma. > >Taking Care of Business > >In a recent column appearing in the New York Times, Krugman stated: >"Cynics tell us that money has completely corrupted our politics, >that in the last election big corporations basically bought >themselves a government that will serve their interests. Several >related events last week suggest that the cynics have a point." As >evidence of heavy-handed corporate opportunism, Krugman takes issue >with the recent claims by security interests that federalizing >airport security would represent a "taking" - a bald move by private >interests to maintain a questionable security status quo free from >public calls for more systematic scrutiny. > >Krugman then assails the House "Stimulus Bill", stating that the >"remarkable thing we learned from that bill was that conservative >politicians - who used to claim that they were improving incentives >by reducing marginal tax rates, and that it was just an incidental >side effect that big corporations and wealthy individuals were so >richly rewarded - no longer feel the need to disguise their >payoffs." As he states, the principal goal of the bill is to repeal >retroactively the corporate alternative minimum tax, "which means >that selected companies would immediately receive huge lump sum >payments from the government, totaling around $25 billion, with no >incentive effect at all." What's worse is that "there are no strings >attached to those gifts: if the companies want to, say, pay huge >bonuses to top executives, they can. Republicans have always >depended on the kindness of corporations, but this bill takes that >faith to extremes." > >Very little here, says Krugman, is representative of sound economic >policies aimed at economic recovery, not to mention the need for >shared sacrifice in times of belt-tightening. Corporate interests, >as Krugman rightly points out, have friends in convenient political >circles. In a blunt conclusion, Krugman sums it up saying that "the >truth must be spoken. Lately our government has not exactly inspired >confidence; its response to terrorism is starting to look a bit >scatterbrained. But on some subjects our leaders are quite >clearheaded: whatever else may be going on, they make sure that they >are taking care of business." > >Corporate-Led Globalization > >When it comes to decrying the disruptive influence of the corporate >agenda internationally - whether in the WTO or the FTAA - most >critics have focused their energies on denouncing the >anti-democratic nature of international trade and investment regimes >and their narrow focus on liberalizing markets at all costs. > >A recent interview with Joseph Stiglitz, however - the ultimate >World Bank/IMF insider - sheds new light on what many have long >suspected: documents and testimony on secret industry-governmental >meetings, the behind the scenes agenda-setting of transnational >corporate interests, and the apparent hidden agenda of the WB/IMF. > >This conspiratorial assessment of hidden agendas could easily be >shrugged off as baseless - except that this account comes to us from >a fired-up and increasingly political Stiglitz. Fired from the World >Bank in 1999 for his criticism of the WB/IMF's policies, Stiglitz >has refused to keep quiet as these institutions - largely serving >under the dictates of the U.S. Treasury Department - impose policies >internationally that he claims have "condemned people to death." > >Only recently in the news for winning the Nobel Peace Prize for >economics, Stiglitz seems to be using this surge in international >attention to criticize corporate-friendly policies and to lend his >support to the momentum of social justice groups organizing for >greater transparency and participation in international >policy-making processes. > >In a recent debriefing with the London Observer's Gregory Palast, >the former World Bank Chief Economist roundly attacked the hidden >agenda of these international institutions. In addition to >testifying to the ideological foundations of much of the WB/IMF's >condition-laden policies lending policies, Stiglitz denounces the >unethical agenda that these institutions impose on all countries >that explicitly create conditions favorable to international >oligarchs and transnational enterprise. > >Having acquired a handful of World Bank documents from undisclosed >sources marked "confidential," "restricted," and "not otherwise (to >be) disclosed without World Bank authorization," Stiglitz began to >document the real effects and aims of the World Bank's four step, >one-size-fits-all, economic restructuring package imposed on less >industrialized countries. > >The first step, according to Stiglitz, is the promotion of >state-level corruption as the facilitator of the "privatization" >requirement which often also serves U.S. political goals - a process >that Stiglitz says would more be accurately called "briberization." >This is followed by step two, "Capital Market Liberalization" which >sets up predictable cycles of "hot money" speculation in >non-productive assets that ultimately leaves the national economy >hemorrhaging from loss of controls on capital. > >Step three is "'Market-Based Pricing', a fancy term for raising >prices on food, water and cooking gas. This leads, predictably, to >Step-Three-and-a-Half: what Stiglitz calls, 'The IMF riot.'" An >outraged populace predictably reacts to the fact that they can no >longer afford to feed themselves. According to the documents >obtained from the WB, these "IMF riots" are predicted and >documented, stating that the resulting "social unrest" and civil >strife has to met with "political resolve." Yet, as Gregory Palast >points out, this process has one positive outcome "for foreign >corporations, who can then pick off remaining assets, such as the >odd mining concession or port, at fire sale prices." Step four is >not far behind: the "poverty reduction strategy" called "Free Trade." > >Stiglitz, however, is careful to point out that the World Bank and >the IMF are not the heartless "free market" ideologues they might >seem. Although the WB/IMF work devoutly to remove the uneconomic >subsidies placed on food and other items essential to the poor, they >are not necessarily against state interventions in markets - as >Stiglitz makes clear, "when the banks need a bail-out, intervention >(in the market) is welcome." For example, as Palast points out, "the >IMF scrounged up tens of billions of dollars to save Indonesia's >financiers and, by extension, the US and European banks from which >they had borrowed" in its enlightened redistribution of subsidies. > >A Political Conclusion > >Palast notes that from this assessment a recognizable pattern >emerges: "There are lots of losers in this system but one clear >winner: the Western banks and US Treasury, making the big bucks off >this crazy new international capital churn." > >So what would Stiglitz recommend in place of the usual WB/IMF fare? >"Stiglitz proposed radical land reform, an attack at the heart of >'landlordism', on the usurious rents charged by the propertied >oligarchies worldwide, typically 50% of a tenant's crops." > >This is, alas, a more delicate subject. It's easier to simply have >faith that constant economic growth will deliver us from the >difficult issues of land tenure and access to income-bearing assets. >This very political program is understandably not on the WB/IMF's >list of chores, since as Stiglitz reminds us, "If you challenge >[land ownership], that would be a change in the power of the elites. >That's not high on their agenda." > >According to Palast, ultimately "what drove [Stiglitz] to put his >job on the line was the failure of the banks and US Treasury to >change course when confronted with the crises - failures and >suffering perpetrated by their four-step monetarist mambo. Every >time their free market solutions failed, the IMF simply demanded >more free market policies." > >With increasing numbers of prominent insiders and mainstream >economists now sounding the alarm bells over corporate-led >globalization, the task for social justice and environmental >advocates has become ever-clearer. We must organize to demand that >these illegitimate trade policies and institutions are either nixed >or fixed through deep democratic reform. > >Sources: > >*Paul Krugman, "Taking Care of Business", Common Dreams, October 28, 2001. >*Gregory Palast, "The Globalizer Who Came in from the Cold", The >London Observer, October 10, 2001. >*Kintto Lucas, "FTAA (Free Trade in the Americas) Is a Threat, Warns >Nobel Laureate", Common Dreams, October 29, 2001. >Director of Policy Initiatives James Phelan is also a co-founder of >Grassroots Globalization Network. > -- ************************************************** * Brian McAndrews, Practicum Coordinator * * Faculty of Education, Queen's University * * Kingston, Ontario K7L 3N6 * * FAX:(613) 533-6596 Phone (613) 533-6000x74937* * e-mail: [EMAIL PROTECTED] * * "Education is not the filling of a pail, * * but the lighting of a fire. * * W.B.Yeats * * * **************************************************
