Remember Gorbachov's curse: 

"we are going to do a terrible thing to you -
we are going to deprive you of an enemy".

Within a bare 10 years of the fall of the Berlin Wall, in the run up to
next week's WTO meeting in Seattle there is  greater global controversy
about capitalism than for the last 60 years.

The review article in this week's Economist (UK) makes a shambles look a
real possibility.

"There is indeed a danger that Seattle will turn out to be a fiasco: no
agreement on an agenda, or a half-hearted one that will boviously lead
nowhere. If that happened, it would encourage anti-WTO groups to go on the

There will of course be press statements and news briefings. The biggest
lobbying by North American labour aristocrats trying to protect their jobs
is expected already, and the servants of modern capitalism know how to
argue the ideological case for free trade.

The less developed countries are little better organised than in Uruguay in
1986 and of course will lose again. Their hopes at the time that the west
would give them permanent preferential access to western markets on unequal
terms to allow them to compensate for unequal exchange of value, have not
been realised.

It is true that there has been a massive increase in trade: The Economist
now states world exports are over 26% of world GDP as against about half
that percentage in '86, and 8% in 1950. 

In one sense the agenda of free trade has been triumphant. But the world
has been changing even faster. In 1986 there were no tv cameras at the
Uruguayan seeside resort. Faxes and  newspapers arrived unreliably. There
were no demonstrators, although the multinational companies could provide
delegations larger than those of individual countries. But up to 100,000
demonstrators are expected in Seattle. And while there are very
heterogenous, as Louis Proyect is concerned to point out, some are very
well organised through the internet and have a large measure of science in
their criticisms. 

The problem is for the west that the major blocs now have little interest
in giving decisive leadership. Europe and the US have to work together to
ditch the third world. But there is little interest in doing so, certainly
as passionately as would be necessary to give a lead for capitalism

Clinton's answer to "food wars" is to merely to say everything should be
labelled. Yet is is clear that Europe is not averse to using this as a sort
of protectionism.

Despite the neo-liberal rhetoric, the capitalist countries secretely still
believe in a sort of mercantilism, a zero sum game, that opening a market
to a competitor means losing wealth, and is compensated only by markets
being opened in return to you. Even Keynes's reformist perspective of some
countries being in surplus, some in debt, eludes them.

The neo-liberal rhetoric is therefore not profound. Although big
multi-nationals certainly want to capture new markets, the rhetoric was in
part a stick to beat the local labour force with. 

The Economist again:

"The EU itself has always been a reluctant liberaliser. Sir Leon Brittan,
until recently the EU's trade commissioner, certainly did much to build
momentum for a new round. But he did it largely despite, rather than at the
instigation of, EU member governments. His successor, France's Pascal Lamy,
lacks Sir Leon's liberal instincts. Although he pays lip service to free
trade, he recently told The Economist that 'I'm not a liberal, I'm still a


The FT this weekend also expresses grave concern in a leader trying to
argue the case for renewed faith in free trade. 

"The critics of capitalism "

Communism may be a dying
political creed, but capitalism still
has its enemies. Next week's
Seattle meeting of the World
Trade Organisation is set to be
swamped by thousands of

Their aims are varied, but all
agree on one thing: the new trade round must be
stopped before it gets started. The backlash against
global capitalism is gaining force and power, and
politicians so far have done little but sit back and watch
it happen.

In many cases, the non-governmental organisations
converging on Seattle are engaging in special pleading.
The NGOs are proving exceptionally good at organising
themselves and using their influence to the full, through
their use of marketing, lobbying and the internet
(protesting, somewhat ironically, has become a truly
global venture).

But the protests have real importance as a warning
signal that public unease with capitalism and the forces
of globalisation is reaching a worrying level. The Asian
crisis showed the world how even the most successful
countries could be brought to their knees by a sudden
outflow of capital. People were outraged at how the
whims of secretive hedge funds could apparently cause
mass poverty on the other side of the world.

This increased concern about the social consequences
of economic activities is mirrored in the return to power of
centre-left governments in the leading European nations.
The rhetoric of economic efficiency that dominated the
1980s has given way to Third Way politics, which is an
attempt to combine economic growth with social justice.

The international community has already taken on board
one of the main lessons of the Asian crisis. There is now
a widespread consensus that short-term capital flows
can be excessively destabilising in all but the best-run
countries. Even the International Monetary Fund, a
staunch supporter of capital account liberalisation prior
to the Asian crisis, now accepts this.

But opposition to free capital flows has extended into a
mistrust of all forms of globalisation, including trade.


Part of the reason why the NGOs' objections to free
trade have acquired such force is that international
organisations have lost much of their moral authority.
The Cold War had given the US and Europe a natural
leadership role over countries outside the Communist
bloc; when the Berlin Wall came down, this role fell with
it. Yet the IMF, the WTO and the World Bank remain, in
the public eye at least, western institutions.

The IMF and the World Bank lost a great deal of
credibility following the Asian crisis. "

Certain reformist answers by the FT follow, which are the subject of a
separate post as this one is long enough already.

Chris Burford


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