> worker rights, and other non-commercial purposes. The
> WTO requires that governments make purchases based only
> on quality and cost considerations. Not only must
> corporations operate with an open eye regarding profits
> and a blind eye to everything else, so must governments
> and thus whole populations
>
> 9. WTO rules do not allow countries to treat products
> differently based on how they were produced -irrespective
> of whether they were made with brutalized child labor,
> with workers exposed to toxins or with no regard for
> species protection
>
> 10. WTO rules permit and, in some cases, require patents
> or similar exclusive protections for life forms. In
> other words, the WTO does whatever it can to promote the
> interests of huge multinationals -there are no principles
> at work, only power and greed
>
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>
> What short-term alternatives are there?
>
>The immediate alternative to the WTO is for international
>cooperation to restrain out-of-control global corporations, capital,
>and markets by regulating global corporations and markets to make it
>possible for people in local communities to control their own
>economic lives. The alternative is to promote trade that:
>
> * reduces the threat of financial volatility and meltdown
> * enlarges democracy at every level from the local to the
> global
> * defends and enriches human rights for all people
> * respects and fosters environmental sustainability worldwide
> * facilitates economic advancement of the most oppressed and
> exploited groups
>
>Rather then the global economy being regulated by small elites in
>corporate boardrooms, we should have bottom up commissions to
>restrict trade when it is socially or environmentally detrimental.
> Further short-term alternatives to the WTO are to:
>
> * encourage domestic economic growth and development, not
> domestic austerity in the interest of export-led growth
> * encourage the major industrial countries to coordinate
>their economic policies, currency exchange rates, and short-term
>capital flows in the public interest
> * establish standards for and oversee the regulation of
> financial institutions by national and international
> regulatory authorities, encouraging the shift of financial
> resources from speculation to useful and sustainable
> development
> * establish a tax on foreign currency transactions- known as
>a "Tobin tax"- to reduce the volume of destabilizing short-term
> cross-border financial flows and to provide pools of funds
> for investment in long-term environmentally and socially
> sustainable development in poor communities and countries.
> * create public international investment funds to meet human
> and environmental needs and ensure adequate global demand
>by channeling funds into sustainable long-term investment
> * develop international institutions to perform functions of
> monetary regulation that are currently performed
>inadequately by national central banks, such as a system of
>internationally coordinated minimum reserve requirements on the
>consolidated global balance sheets of all financial firms.
>
> The alternative to the WTO is to reorient international financial
>institutions from the imposition of austerity and destructive forms
>of development to support for labor rights, environmental protection,
>and rising living standards. The alternative is for wealthy countries
>to write off the debts of the most impoverished countries and to
>create a permanent insolvency mechanism for adjusting the debts of
>highly indebted nations. The alternative is to use regulatory
>institutions to help establish public control and citizen sovereignty
>over global corporations and curtail corporate evasion of local,
>state, and national law, such as establishing a binding Code of
>Conduct for Transnational Corporations that includes regulation of
>labor, environmental, investment, and social behavior. The
>alternative is to renegotiate WTO, NAFTA, and all other agreements
>regulating international trade to reorient trade and investment to be
>means to just and sustainable development.
>
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>
> What are the IMF and the World Bank?
>
> In the aftermath of World War II, besides the United Nations,
>the
> important international economic organizations created at the
> conference held at Bretton Woods were the International Monetary
> Fund (IMF) and the International Bank for Reconstruction and
> Development (IBRD), now known as the World Bank. The IBRD- World
> Bank was established to help finance the reconstruction of
> war-torn Europe and the development of the poorer countries of
>the
> world. The IMF mandate was to regulate an international monetary
> system based on convertible currencies to facilitate global
>trade
> while leaving sovereign governments in charge of their own
> monetary, fiscal, and international investment policies.
> Significantly, the effort to establish the International Trade
> Organization (ITO) ended in failure, leaving the "minimalist"
> General Agreement on Tariffs and Trade (GATT) as its surviving
> remnant. But all that was more than 50 years ago. The IMF has
>now
> become the "point person" for efforts to "liberalize," or
> deregulate the international economic system.
>
> The IMF has prescribed the same medicine for troubled third
>world economies for two decades now:
>
> * Monetary austerity: Tighten the money supply to raise
> internal interest rates to whatever heights are needed to
> stabilize the value of the local currency
> * Fiscal austerity: Increase tax collections and reduce
> government spending dramatically
> * Privatization: Sell off public enterprises to the private
> sector
> * Financial liberalization: Remove restrictions on the inflow
>and outflow of international capital as well as restrictions on what
>foreign businesses and banks are allowed to buy, own, and operate.
>
> Only when governments sign this "structural adjustment agreement"
>does the IMF agree to lend enough to prevent default on
>international loans that are about to come due and otherwise would
>be unpayable. Arrange a restructuring of the country's debt among
>private international lenders that includes a pledge of new loans.
>
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>
> What is the effect of the IMF?
>
> The predictable consequences have always been disastrous. Tight
>monetary policy and skyrocketing interest rates not only stop
>productive investment, stampeding savings into short-run financial
>investment instead of long-term productive investment, it keeps
>many businesses from getting the kind of month-to-month loans
>needed to continue even ordinary operations. This fosters
>unemployment and drops in production and therefore income. Fiscal
>austerity -raising taxes and reducing government spending-further
>depresses aggregate demand, also leading to reductions in output
>and increases in unemployment. Likewise, if any of the government
>spending eliminated was actually improving people's lives, then
>reductions in those programs eliminates those benefits.
>Privatization of public utilities, transport, and banks is always
>accompanied by layoffs. Whether productivity and efficiency is
>improved in the long run depends on how badly the public
>enterprises were run in the first place, and if private operation
>proves to be an improvement.
>
> One of the most glaring inefficiencies of "structural adjustment,"
>even on its own terms, has been that in its haste to reduce public
>sector budgets, the IMF has seldom taken the time to try and
>distinguish between poorly run and well run public enterprises. In
>its crusade to privatize, the IMF routinely lumps efficient public
>enterprises together with "white elephants" that do provide poor
>service to the public while paying bloated salaries to relatives
>and political supporters of ruling political parties. The IMF
>never considers the possibility that private replacement might be
>even worse.
>
> Hasty removal of restrictions on international capital flows makes
>it easier for wealthy citizens and international investors to get
>their wealth out of the country, i.e., removal of "capital
>controls" facilitates capital flight, further reducing productive
>investment, production, income, and employment. Removing capital
>controls further exposes the local economy to the vicissitudes of
>global capital mobility, including the disease of "contagion."
>
> Back to top of this page
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>
> How do we change such important institutions as the global
> economy?
>
> The same way one wins a new stoplight on a busy street, wins a pay
>raise, wins an affirmative action law, or ends a war -by raising
>social costs that the policy makers find so odious and dangerous
>that they feel they must give in lest the costs climb even higher.
>What do elites care about even more than they care about these
>international agencies? Not much -it's true, but one thing is the
>overall stability of their material advantage and power. Pursuing
>WTO agendas is something corporate and political elites want to
>do, there is no denying that. On the other hand, if doing so
>polarizes populations into movements that threaten not only these
>policies but even the underlying requisites of profit-making and
>governing, that is too high a price to pay. They do not want to
>awaken a "sleeping giant" -the populations that they govern and
>exploit.
>
> So we raise social costs by educating a growing public regarding
>the WTO and other global financial institutions and by channeling
>the resulting anger and aspirations into social movements that
>challenge the WTO and local government's business as usual. What
>will make these movements most compelling is if they clearly
>embody the threat to
>
> * grow continuously * become steadily more militant
>* diversify in focus from the WTO to international trade more
>broadly, to international relations, and finally to domestic
>economic policies and arrangements as well
>
> Back to top of this page
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>
> What is the relation between capitalism and institutions like the
> WTO, IMF, and World Bank?
>
> Capitalism is an economic system defined by private ownership of
>the means of production, corporate workplace structure, and market
>allocation. These defining features contour much of what can and
>will happen in capitalist economies. Some implications are: that
>those who own means of production will accrue vast profits and
>hold most power; that those who manage and otherwise monopolize
>daily decision-making will have considerable income and power as
>well; and that those who only obey orders and carry out labor
>defined by others will be overwhelmingly subordinate in income and
>in power. Corporations will dominate economic and social life by
>creating a virtual dictatorship of the owners and administrators
>of workplaces, and by corrupting political relations with
>commercial values and pressures in pursuit of profits. Citizen's
>behaviors will be pushed by market competition toward
>individualist selfishness and outcomes will bias from collective
>fulfillment toward private profit.
>
> Another mark of capitalism is the market-driven competitive
>pursuit of profit among capitalists and the use of every means
>they can muster to defend and enlarge their advantage relative to
>workers. To further both agendas, various institutions are
>established. In the international realm these include the WTO,
>IMF, and World Bank, each a natural outgrowth of the desire of the
>most powerful capitalists to (a) dominate their own economies
>without restraint and (b) extend their profit seeking as widely
>internationally as they are able to, again, without restraint.
>
> Back to top of this page
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>
> What is an alternative to capitalism and markets?
>
> Ultimately, if we don't like international agencies because they
>elevate corporate profit over popular well-being, private power
>over democratic participation, and short-run expediency for the
>few over long-run fulfillment and sustainability for the many,
>then we should also reject private ownership, corporate structure,
>and markets on the exact same grounds.
>
> But what alternatives are there? This is controversial, of course,
>but an alterntive economy might include things like: remuneration
>according to effort and sacrifice rather than according to private
>property, power, or output; jobs balanced for quality of life and
>empowerment plus workers and consumers council democracy rather
>than hierarchical corporate structure and authoritarian
>administration from above; and participatory cooperative social
>planning rather than individualist, corporatist, competitive
>market exchange.
>
> Movements for short-run program such as reforming or eliminating
>the WTO can benefit greatly from orienting their analyses,
>program, and strategies in tune with longer-run aims. This
>increases the likelihood of members sustaining hope and
>commitment; increases the threat that the movement's growth poses
>to elites, making it more compelling and powerful; and helps to
>insure that today's victories lead to further gains tomorrow and
>ultimately to a new economy.
>
> Back to top of this page
> Back to ZNet top
> Back to ZNet's Global Economics top " JC
>
>
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