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I haven't read Noreena Hertz, but I intend to. I have just finished
Joseph Stiglitz's "Globalization and Its Discontents" and cannot escape the
feeling that we live in a facade which fronts a shadowy world of games and
manipulations we can't understand unless we are among the players, or even
then.
Stiglitz was economic advisor to Clinton and head of economics at the World
Bank, which suggests that he should know what he is talking about. He is
highly critical of the so-called "Washington Consensus", the neo-liberal
policies emphasizing financial stabilization, market (including capital market)
liberalization and privatization that the IMF has applied in funding
international bailouts, and that also underscore the work of institutions like
the World Bank and WTO. He is enormously critical of how the IMF
handled the crises in East Asia which began with the collapse of Thai baht in
1997, and of how it handled the Russian crisis of almost the whole of the
1990s. In both cases, the policies were, in his opinion, applied much too
rapidly, too forced and much too hard on the bulk of the populations of the
affected countries. It could, according to Stiglitz, have been done much
better.
I spent a month in Russia, mainly Moscow, in 1995, and vividly recall the
chaos of the time. However, what I found difficult then, and still
find difficult even after reading Stiglitz, is sorting out how much of the chaos
was due to the crumbling of the old system and how much may have been due to the
shock therapy application of the market economy based system. At the time,
the IMF had provided the Russian government with loans, but another installment
that was to be forthcoming was being held back because the government was not
implementing reforms fast enough. What the IMF may have recognized, but
would not have admitted publicly, was that Russia was then incapable of further
reform. The rapid crumbling of the old and the far too rapid
introduction of the new had created an impossible situation. Dollars
flowing into the country rapidly found their way out again and into Swiss bank
accounts. Influential people, able to obtain foreign loans, bailed the
Russian government out in the notorious "loans for shares" scheme and wound up
owning many of Russia's most valuable assets (see Chrytia Freeland, "Sale of the
Century", Doubleday, 2000). Meanwhile, the vast majority of Russia's
people was sinking into an impossible poverty. If this was a product or
even an effect of the Washington Consensus, Stiglitz is right to be
critical.
What is frustrating about Stiglitz is that he remains the economist.
He links the Washington Consensus policies directly to the purposes of the US
Government, the IMF's largest shareholder, but does not tell us what those
purposes may be. One suspects there are large games going on - games in
which the IMF with its dependence on the US Treasury is a principal
player. Perhaps that's paranoia, but one would at least like some
assurance that the IMF has behaved the way it has out of naivety or even
ignorance, and that it is not playing the game of American capital.
Stiglitz says little about this, and instead preaches reform. He tries to
convince the IMF economists that they should move back to a more Keynesian
approach instead of pursuing the market fundamentalism that has become their
trademark. Perhaps they will listen, but somehow I rather doubt it.
Ed
Ed Weick
577 Melbourne Ave.
Ottawa, ON, K2A 1W7
Canada
Phone
(613) 728 4630
Fax (613) 728 9382
----- Original Message -----
Sent: Monday, July 08, 2002 10:01
PM
Subject: RE: Global Capitalism and the
Death of Democracy
I
saw the interview. I too was struck by her confidence and
assurance. During the interview she placed some postives from the fact
that CEOs are inviting her around for a talk. I wonder. She should
learn and understand the danger of being co-opted. I think she is in a
management school in the UK. So she might be the house radical. I
hope not. I fear so, though. Let's see.
I
note too that the interview was long on identification of problems and short
on policy solutions. Again, let's see.
Arthur Cordell
Greetings:
I
apologize that I cannot provide a link to video of this interview I’m
promoting, rather than a link to the transcript, but it is worthwhile
reading, especially for those of you on FW who are interested in the debate
about globalization. I was
struck by this woman’s young age and her striking focus. I know, you thought I was going to
write “striking beauty”. Well,
she was pretty but it was the look in her eye and verbal assurance that
caught my attention. Tell me, O
Wise Ones, is it mature knowledge or youthful confidence? Are her ideas creative fiction or
imaginative solutions?
http://www.pbs.org/now/transcript/transcript_hertz.html
Bill
Moyers interview with Noreena Hertz, author of Silent Takeover, Global Capitalism and
the Death of Democracy.
Free
Press; ISBN: 0743234782; (June 2002) 247 pages
“Noreena
Hertz was born in England, received her MBA from Wharton School of Business
and her Ph.D in economics from the University of Cambridge, where she is
Associate Director of the Centre for International Business. Ten
years ago she helped Russia organize its first stock
market.”
And
a five-star reader review from amazon.com:
“Obviously
written for a general audience, not an academic or business one, the
arguments, and the examples used, have appeared elsewhere, but these
separate strands are woven together into a tapestry that looks a lot like
the writing on the wall.
First
Hertz narrates how we arrived at globalization and then identifies a number
of problems with globalization: the polarizing of rich and poor as the rich
get ever richer and poor get ever more numerous (with the consequent loss of
social cohesion), the decision making of the WTO and IMF, who rely on
economic criteria alone, when the consequences of those decisions are not
only economic, the purchasing of political power by multinational
corporations with the resulting cynicism and apathy of voters, the promoting
of business interests instead of public interests through the media after
the media has been consolidated into large conglomerates, relying on the new
consumerism and shareholder activism by a minority instead of political
action by a majority and relying on temporary charity by the super rich and
multinational corporations instead of permanent governmental action to
promote social and economic justice and equality.
Hertz
has a common sense solution: "In a world of global capital, politics must be
reframed at the global level, too."
Six steps will globalize politics: Minimum health, safety and welfare
standards at work, international regulation of multinationals, a global
legal aid fund, a World Social Organization, steps to reduce economic
inequality (such as debt reduction and increased aid) and a global tax
authority.
This is, well, optimistic. (A World Social Organization that does anything
besides talk? Yeah, right.)”
And
publisher’s comments via wonderful Powell’s bookstore in Portland:
http://www.powells.com/cgi-bin/biblio?inkey=62-0743234782-0
“Named
one of the best books of the year by The
Sunday Times of London, and already a bestseller in England,
Noreena Hertz's The Silent
Takeover explains how corporations in the age of globalization
are changing our lives, our society, and our future -- and are threatening
the very basis of our democracy.
Of
the world's 100 largest economies, fifty-one are now corporations, only
forty-nine are nation-states. The sales of General Motors and Ford are
greater than the GDP (gross domestic product) of the whole of sub-Saharan
Africa, and Wal-Mart now has a turnover higher than the revenues of most of
the states of Eastern Europe. Yet few of us are fully aware of the growing
dominance of big business: newspapers continue to place news of the actions
of governments on the front page, with business news relegated to the inside
pages. But do governments really have more influence over our lives than
businesses? Do the parties for which we vote have any real freedom of choice
in their actions?”
Regards,
Karen Watters
Cole
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