You'll note that nothing much in this article refers to free trade o the free market. It all deals with the failure of governmental policies, both national and international. It's certainly about neo-liberalism - but it has nothing to do with liberalism.
Let's take one paragraph. It begins:
["As the dollar rose in value in the mid-1990's, so did the peso, making
Argentine goods uncompetitive both globally and locally."]
Let's hear it for dollarization! I'm sure no-one believes pegging the peso to the dollar is an example of free trade. In fact, a freely floating currency is the way trade is controlled in a free trade economy.
On the other hand, the peso was enjoying a 5000% inflation rate. Will anyone suggest that it was free trade and not a government that was responsible for that?
Anyway the neo-liberal dorks who dropped the bottom out of their currency were now declaring each peso was worth a dollar. My God! It's like a Three Stooges comedy. Puts a whole new face on laissez-faire.
["Raising tariff barriers against imports flooding in was regarded as a no-no."]
Of course it's a no-no. The best thing that could happen to Argentineans in trouble would be to get cheap things from elsewhere. I'll prove it. You send me a couple of lbs of caviare and several bottles of Dom Perignon, I promise not to pay you a thing for them.
Then think how well off you are. Your exports are up - well done! Yet your imports are nothing. You have a great positive balance of trade. You enjoy that while I drink the champagne.
The paragraph continued:
[Borrowing heavily to fund the dangerously widening trade gap, Argentina spiralled into debt . . . . "]
I thought this was free trade, or the free market. What's a positive or negative trade balance got to do with Argentina?
We have a free market. As I drank my champagne, I would feel touched that California Governor wanted to help me. I might even offer him a glass (small) of my Dom Perignon. However, my caviare is almost gone so I approach you for some more. Strangely enough you don't want to give me any more. You have realized I meant it when I said I wouldn't pay you for it.
But do you realize what you have done? Look at the next bit of this awful paragraph.
["Borrowing heavily to fund the dangerously widening trade gap, Argentina spiralled into debt . . . . . . . . . ]
What the ruddy heck does it have to do with "Argentina"? Does "unbridled market freedom" mean the government finances trade. Now, never have I read in free market literature that free trade means that government meddles with trade.
I'm sorry that Governor Davis didn't meddle in our transaction. He ought to. I like caviare, but you won't give me any. You've solved my trade deficit. Even so, maybe I can get the governor to balance my trade with you by paying you for my Champagne and Caviare. Then I bet you'll let me have some more.
The paragraph finishes with:
[ " . . . . . .and the more it borrowed, the higher the interest rates rose as
creditors grew increasingly alarmed at the consequences of the unbridled
market freedom they had benefited from initially." ]
I think they grew alarmed by the complete incompetence of government meddling with the economy. But, what is interesting is the complete ignorance of what freeing the market is. Either that or he knows the true believers will lap it up without taking a moment to consider how silly it is.
I think Bello is a fitting partner to Deaks in the mindless propaganda department.
And that was just one paragraph!
Harry
__________________________________________
Arthur wrote:
This may be of interest.
-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]
Sent: Friday, January 25, 2002 6:56 PM
To: [EMAIL PROTECTED]
Subject: The twin debacles of globalisation - Walden Bello in ZNet
Znet
The twin debacles of globalisation
By Walden Bello
It is said that in politics and in war, fortune smiles all too briefly.
After allowing it to briefly savour the success of its Afghanistan campaign,
history, cunning and inscrutable as usual, has suddenly dealt the Bush
administration two massive body blows: the Enron implosion and the Argentine
collapse. These towering twin disasters threaten to push the global elite
back to the crisis of legitimacy that was shaking its hegemony worldwide
prior to September 11.
Enron forcefully reminds us that free market rhetoric is a corporate con
game. Neoliberalism loves to couch itself in the language of efficiency and
the ethics of the greatest good for the greatest number, but it is really
about promoting corporate power. Enron loved to extol the so-called merits
of the market to explain its success, but in fact its path to becoming the
US's seventh largest corporation was paved not by following the discipline
imposed by the market but by strategically deploying cold cash, and lots of
it. Enron literally bought its way to the top, throwing around hundreds of
millions of dollars in less than a decade to create what one businessman
described to the New York Times as the ''black hole'' of deregulated energy
markets in which its financial shenanigans could thrive unchecked.
To make sure government would look the other way and allow the ''market'' to
have its way, Enron was generous with those willing to serve it, and few
earned more Enron dollars than George W. Bush, who received some USD 623,000
for his political campaigns in both Texas and nationally from his friend
Kenneth Lay, Enron CEO. The deep enmeshing of Bush and a number of his key
lieutenants -- Vice President Dick Cheney, Attorney General John Ashcroft,
US Trade Representative Robert Zoellick, top presidential economic adviser
Larry Lindsey, to name just the most prominent -- in Enron's corporate web
has shaken off George W's post-September 11 image of being President of all
Americans and brought back the reality of his being the chief executive
officer of corporate America.
The Enron scandal pulls Americans right back to the bitter sozialepolitik of
the nineties when, as Bush himself put it in his inaugural speech, ''it
[seemed] we share a continent but not a country''. It brings back the
ideological context of the landmark electoral campaign of 2000, when Bush's
fellow Republican, John McCain, made an almost successful bid to become the
presidential standard bearer by focusing on one issue: that the massive
corporate financing of elections that had transformed US democracy into a
plutocracy was gravely undermining its legitimacy.
Corporate-driven globalisation, we have always held, is a process that is
marked by massive corruption and is deeply subversive of democracy. Shell
was a good case study in Nigeria. Scores of transnational corporations and
the World Bank were implicated with the Suharto political economy in
Indonesia. Now Enron strips the veil from what Wall Street used to call the
''New Economy'', which showered rewards on sleazy financial operators like
Enron while sticking the rest of the world with the costs, not least of
which is what is shaping up to be the worst global downturn since the
1930's. Which is why we have always told World Bank types who want to
lecture us on good governance that they should first tell Washington to get
its house in order.
Corporate corruption is central to the US political system, and the fact
that it is legal and assumes the form of ''campaign finance'' funnelled to
pols by ''political action committees'' does not somehow make it less
immoral than crony capitalism of the Asian variety. Indeed, corruption of
the Washington variety is much more damaging, because momentous decisions
purchased with massive cash outlays have not only national but global
consequences. Corrupt Third World politicians ought to be hung, drawn, and
quartered, but let's face it, the amounts of cash and the quotient of power
they deal in are peanuts compared to the scale and impact of
influence-peddling in Washington.
If Enron illustrates the folly of deregulation cum corruption, Argentina
underlines that of another facet of the corporate globalist project: the
liberalisation of trade and capital flows. USD 140 billion in debt to
international institutions, its industry in chaos, and an estimated 2000
more people falling daily below the poverty line, Argentina is in a truly
pitiable state.
Argentina brought down its trade barriers faster than most other countries
in Latin America. It liberalised its capital account more radically. And in
the most touching gesture of neoliberal faith, the Argentine government
voluntarily gave up any meaningful control over the domestic impact of a
volatile global economy by pegging the peso to the dollar. Dollarisation,
some technocrats promised, was right around the corner, and when that
happened, the last buffers between the local economy and the global market
would disappear and the nation would enter the nirvana of permanent
prosperity.
Now all of these measures were taken either at the urging of or with the
approval of the US Treasury Department and its surrogate, [the]
International Monetary Fund. In fact, in the wake of the Asian financial
crisis, when capital account liberalisation was increasingly seen by most
observers as the villain of the piece, Larry Summers, then Secretary of the
Treasury, extolled Argentina's selling off of its banking sector as a model
for the developing world: ''Today, fully 50 per cent of the banking sector,
70 per cent of private banks, in Argentina are foreign-controlled, up from
30 per cent in 1994. The result is a deeper, more efficient market, and
external investors with a greater stake in staying put.''
The Argentine technocrats seemed determined to outdo their Chilean rivals in
their obeisance to the market -- interestingly enough, just as the Chileans
were beginning to question its efficacy in the volatile area of capital
flows.
As the dollar rose in value in the mid-1990's, so did the peso, making
Argentine goods uncompetitive both globally and locally. Raising tariff
barriers against imports flooding in was regarded as a no-no. Borrowing
heavily to fund the dangerously widening trade gap, Argentina spiralled into
debt, and the more it borrowed, the higher the interest rates rose as
creditors grew increasingly alarmed at the consequences of the unbridled
market freedom they had benefited from initially.
Foreign control of the banking system was no help, contrary to the Summers
doctrine. In fact, foreign control simply facilitated the outflow of much
needed capital by banks that became increasingly reluctant to lend to both
government and local businesses. With no credit, small and medium
enterprises, and not a few big ones, closed down, throwing thousands out of
work.
Cap in hand, Argentina went to its mentor, the IMF, for a multibillion
dollar loan to meet payments on the USD 140 billion external debt coming
due. The Fund refused unless the government made cuts in public expenditures
and imposed a tight money policy. As Joseph Stiglitz has noted, this was
precisely the mistake the IMF made in Asia in the wake of the financial
crisis: instead of reflating the economy, you impose an inflation-fighting
programme that accelerates the contraction of the economy. It seems that the
Fund is institutionally -- and intentionally -- incapable of learning from
its mistakes, and Argentina is one more reason for why it should be
abolished.
Reginald Dale, the doctrinaire free-market columnist at the International
Herald Tribune, worries that the Argentine debacle may have negative
consequences beyond Argentina, chief of which are the erosion of the
legitimacy of the globalisation project and a resurgence of populism, making
it impossible for the Bush administration to bring to a successful
conclusion Washington's projected Free Trade Area for the Americas (FTAA).
It is up to the movement against corporate-driven globalisation to prove
Dale and the Wall Street-Washington-Houston mafia right, and not only in
Latin America. The debacles of Enron and Argentina are so clear in their
causes and so easily explained to ordinary people throughout the world that
they provide the perfect handle with which the movement can regain globally
the momentum it lost on September 11. As they say in Texas, ''Let's git 'em
buzzards.''
******************************
Harry Pollard
Henry George School of LA
Box 655
Tujunga CA 91042
Tel: (818) 352-4141
Fax: (818) 353-2242
*******************************
