> Subject: [fairtrade] Renowned Economists Denounce Corporate -Led Globalization > > Share This Article With Your Friends > Published on 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. > ### > > _________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki Phone +358-40-7177941 Fax +358-9-7591081 http://www.kominf.pp.fi General class struggle news: [EMAIL PROTECTED] subscribe mails to: [EMAIL PROTECTED] Geopolitical news: [EMAIL PROTECTED] subscribe: [EMAIL PROTECTED] __________________________________________________
