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2000-10-23

Questioning Globalization

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As thousands of activists gathered this past weekend in South Korea to protest the latest round of high level international finance meetings, this time it was the third Asia-Europe Meeting (ASEM), it is becoming increasingly obvious that the anti-globalization movement is swelling. [includes rush transcript]

Today we go to a speech given by Professor Noam Chomsky at John Hopkins University in Baltimore MD where he addresses the issues of globalization.

Guest:

  • Noam Chomsky, an Institute Professor at MIT, he is a world renowned linguist, philosopher and political analyst. His latest book is ??Rogue States, The Rule of Force in World Affairs.

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Over the weekend, thousands of people protested in South Korea around an international summit that was taking place. Asian and European presidents, prime ministers and officials gathered there with 10,000 protesters, again, dealing with the issue of globalization.

Today, we’re going to take up that issue with MIT Professor Noam Chomsky. He’s a professor of linguistics at the Massachusetts Institute of Technology, and he has long been a political analyst and social critic, author of many books. He gave this speech just months ago at Johns Hopkins University in Baltimore, Maryland.

NOAM CHOMSKY: Let’s begin with the term globalization. It’s conventionally used now to refer to a very specific form of international — integration of international society that’s been proceeding for about twenty-five years, extending, recapitulating traditional patterns, but with some important changes, as well. The process is sometimes described as a kind of force of nature. It’s "There is no alternative" — TINA — Maggie Thatcher’s famous phrase. Those slogans are convenient for the beneficiaries of the process, but they don’t even have the merit of the ritualistic incantations of Marx’s iron laws of history, and they can be dismissed.

There are many choices available within the existing framework of institutions, and the institutions are no more immutable now than they’ve ever been throughout history. At every point we can ask why certain specific choices are made, whether they’re the paths that should be chosen, or whether they should and whether they should then be followed or altered or maybe quite drastically modified.

In the past year, the global issues have very largely been framed in terms of sovereignty, meaning the rights of political entities to be — to follow their own course — maybe benign, maybe ugly — and to do so free from external interference.

Now, in the real world, external interference means interference by highly concentrated power, the major center of course in the United States. This concentrated global power is called by various names, depending on which aspect of the problems of sovereignty and freedom we have in mind. So sometimes it’s called the Washington Consensus or the Wall Street-Treasury complex, Jagdish Bhagwati 's phrase — economist at Columbia — or it's called NATO or the International Economic Bureaucracy or G7 or G3, or sometimes more realistically G1.

And from a more fundamental point of view, we could describe it as an array of mega-corporations, often linked to one another by strategic alliances which administer the global economy — that includes the interchanges that are misleadingly called trade — in a kind of global mercantilism with tendencies towards oligopoly in most sectors, heavily reliant on the state sector to create the dynamic components of the economy to socialize costs and risks and to subdue recalcitrant elements — kind of a mouthful, but I think it’s a fairly accurate first approximation to what we might call "really existing globalization."

The issues of sovereignty and freedom arise in two domains, dramatically so in the last year. One domain has to do with sovereign right to be free from military intervention. Here, the questions arise in a world order based on sovereign states. The second category has to do with the right to be free to follow one’s own path in the face of socioeconomic intervention.

Now, here the questions arise in the framework of the corporate mercantilism that’s linked to state power and the international bureaucracies. And in both domains, for obvious reasons, the dominant role is that of the United States. Well, both of these issues — kinds of issues have been lively and contentious in the past year. Because of time limits, I’ll say only a few words about the military-political intervention — reluctantly; there’s a lot to say about it — and then I’ll turn to some comments on the other.

With regard to the issue of military intervention and sovereignty, the last year has been quite an interesting and, in some ways, unusual one. From early 1999, just about — beginning just about a year ago, there has been a remarkable chorus of self-adulation of a kind rarely seen outside totalitarian states, having to do with NATO’s bombing of the Federal Republic of Yugoslavia. This was — I’ll — these are just a few representative quotes from the mainstream and leading figures. This was regarded as "a landmark in international relations, opening a new era in which the enlightened states will use force where they believe it to be just, disregarding the restrictive old rules, like the UN Charter, in favor of modern notions of justice that they will fashion."

The "enlightened states," we are told, are led by an idealistic new world bent on ending inhumanity — namely the United States — which is now at the height of its glory, opposed only by the defiant, the indolent, and the miscreant — the disorderly elements of the world. That’s roughly the worldview within the "enlightened states." No particular criterion is offered as to how you join the club — well, apparently — but it’s kind of self-anointed "enlightened states."

Outside the club, the circle of enlightened states, the picture was quite different. It’s kind of interesting that little of it was reported here, but one can find it. There’s a very broad range of opinion outside of Europe and the United States. Its main perspective was probably captured rather accurately by Alexander Solzhenitsyn, who gets quoted here when he says the right kind of things, but not this time. He described what he called "the aggressors" as "opening a new era in which might is right. If protection of the oppressed was their real concern, they could have been defending, for example, the miserable Kurds." He says "for example," because it’s only one case, though a rather revealing one. A leading military strategic analyst in Israel described the new era as a return to the colonial era. The use of force, as in the colonial era, is cloaked in moralistic righteousness.

Now, he described the "enlightened states" as a "danger to the world," warned that their actions are going to lead to nuclear and other kinds of proliferation, because others will simply have to develop weapons of mass destruction to defend themselves against the predatory powers that are now out of control, facing no deterrent. Similar views were quite widely expressed throughout a good part of the world, most of it, in fact.

Solzhenitsyn’s reference to the "miserable Kurds" is quite appropriate. He was speaking just about at the time when NATO was commemorating its fiftieth anniversary in Washington last April. It wasn’t a celebration, because the meeting was held under the somber shadow of ethnic cleansing right across the borders of NATO. It took rather impressive discipline for the participants in the meeting and commentators on it not to notice that some of the worst ethnic cleansing of the '90s was within NATO, not across its borders, namely in the southeastern part of NATO, where just in the Clinton years two to three million people were made refugees, tens of thousands killed, 3,500 villages destroyed. That's seven times Kosovo under NATO bombing. All of this was significantly — relied significantly on a huge flow of arms from the United States, escalating as the atrocities peaked through the Clinton years. But somehow, that was missed.

The difference of judgment about the enlightened states was actually being put to a rather clear test exactly at the time that the fine words were pouring out in such an impressive stream. So while the enlightened states and their educated elites were praising themselves for their astonishing humanism, they had a very good opportunity to apply the modern notions of justice that they were fashioning to end inhumanity, and it’s instructive to see how they did so.

In November — this is the second major atrocity that reached prominence in 1999. In November 1998 new contingents of the Indonesian commandos, Kopassus commandos, who are renowned for their sadism and brutality and had just emerged from new US training, Operation Iron Balance in 1998, which was conducted more or less in secret because it was in violation of congressional intention and legislation, they entered East Timor along with about 5,000 new recruits. And in February 1999, they initiated a military operation, Operation Clean Sweep, which was an operation designed to murder, destroy, intimidate, which they did on a vast scale, including major massacres, the most famous of them maybe the massacre in Liquiçá, where maybe fifty or sixty people were murdered in a church in which they’d taken refuge in April.

According to rather credible church sources in East Timor, they had killed about 3,000 to 5,000 people just in the first months of the year, from February through July. More later. And they were giving very clear and explicit warnings, which it took a lot of effort to miss, that much worse was going to come after the referendum scheduled for August, if the population voted for independence. With astonishing bravery, the population did vote for independence. Virtually everyone voted, about 80%, for independence, although they were totally defenseless and at the mercy of the Indonesian forces. The US armed and trained Indonesian forces and the paramilitaries that they organized.

Shortly after that, about 85% of the population was brutally driven from their homes — that’s 750,000 people — and the country was mostly destroyed, and a quarter of a million or so were driven into Indonesian territory, where about 150,000 still remain in concentration camps that have limited access.

Notice that in this case there was no issue of sovereignty. These are atrocities going on where there’s no question of sovereignty. Indonesia’s sovereign rights in East Timor were comparable to those of Nazi Germany in Occupied France. Indonesia had invaded in 1975. It had been ordered at once by the Security Council to withdraw immediately. The United States actually voted for that resolution, but it was meaningless for reasons explained by the US ambassador, UN Ambassador Daniel Patrick Moynihan, who wrote his memoirs a couple of years afterwards and explained in words that should be memorized by anyone who takes their freedom seriously. Moynihan explained that though the US voted for the UN resolution, the State Department wanted things to turn out as they did. "And my instructions," he said, "were to render the United Nations utterly ineffective in anything it might do, instructions which I carried out," he says, "with considerable success."

AMY GOODMAN: Noam Chomsky, Professor of Linguistics at the Massachusetts Institute of Technology, speaking recently at Johns Hopkins University in Baltimore, Maryland. We’ll be back with his speech on globalization in a minute.

[break]

AMY GOODMAN: You are listening to Pacifica Radio’s Democracy Now!, the Exception to the Rulers, as we return now to Professor Noam Chomsky. This weekend, major protests in South Korea around an international Asian summit, and Noam Chomsky continues by talking about globalization.

NOAM CHOMSKY: It’s because of these facts —- that’s the reason why about a century ago, in all the industrial societies, financial markets were regulated, because they were just leading to total catastrophe. But the regulation that was instituted internal to countries is rejected by the Washington Consensus and the international arena; that’s a major problem today, well recognized, even in the economic report of the President, though there again are beneficiaries, primarily financial institutions. Well, the tendencies described by the Volcker Commission and the [inaudible] are also discussed in a lot of technical studies. There’s variation. One can’t be certain about anything as poorly understood as the international economy, very poorly understood. But it’s reasonably clear that the dismantling of the Bretton Wood system in the mid—’70s led to a decline and deterioration of virtually all macroeconomic indicators.

Growth of the economy, growth of productivity, capital investment all slowed. Interest rates are far higher, which slows the economic growth and also fluctuate much more, increases instability, undermines investment. Financial crises have increased with severe human cost. Wages have stagnated or declined, while workloads have increased. That’s particularly striking in the United States, where real hourly wages for the majority of workers, non-supervisory workers, are more than 10% below what they were in the mid-’70s, which is kind of astonishing. This usually continually goes up. And the workload is increased to the highest in the industrial world.

Global inequality has greatly increased; that’s well known. The most dramatic figures are not among countries; rather, within the global population. There’s a recent study by a World Bank economist, which just carries it up to the mid-'90s, who points out that if you take the top 5% and the bottom 5% of the global population, their ratio of wealth was about roughly eighty-to-one in 1988, and it went up to 114-to-1 in 1994, and it's been increasing steadily since. The standard measure of inequality, the so-called Gini coefficient, has reached the highest level for the global population that’s on record for any population in the past.

The beneficiaries of this system commonly argue that it doesn’t really matter very much if the — you know, inequality grows, as long — since the economy is raising all the boats. First of all, that’s false. It matters quite a lot. Inequality turns out to have very severe effects. But apart from being false, it’s irrelevant, because most of the boats are sinking or barely staying afloat by paddling a lot harder.

The period pre- and post-mid-1970s is quite commonly called by economists —- many economists called the earlier period up to the mid—'70s a "golden age" of very high growth and increase of social benefits and so on, followed from the mid-'70s by what they call a "leaden age." That’s true even by conventional measures. The steady improvements that should be expected as a matter of course have either slowed or reversed, apart from highly privileged sectors, which in the rich countries is a lot of people — not the majority, but a lot.

The situation is much worse if you look at measures that matter for human life, like the social indices, index of social health, and, much worse, when you look at the poorer countries.

Well, there are a number of crucial indices that aren’t discussed in the Fordham study. Let me mention a couple. One of them is insecurity, which results from what’s called technically "labor market flexibility." The World Bank a couple of years ago, in a development report, pointed out that — I’m quoting — "labor market flexibility has received a bad name, as a euphemism for pushing wages down and workers out." Actually, it’s received that bad name because that’s exactly what it is. But they say that "nevertheless, despite the bad name, labor market flexibility is essential in all regions of the world. The most important reforms involve lifting constraints on labor mobility, and on wage flexibility, and breaking the ties between social services and labor contracts." That last phrase means dismantling the improvements in the quality of life that have been won over many generations of hard and bitter struggle. That has to be reversed.

When they talk about increasing labor mobility, they’re not referring to the foundations of free trade theory as described by Adam Smith, who pointed out that free trade is based crucially on free movement of labor, free distribution of labor. They’re not calling for that. That’s out of the question. What they mean by increasing labor mobility is increasing the possibility of kicking people out of their jobs. When they talk about increasing wage flexibility, they mean flexibility down, not up, except for a small number of people, where it goes way up.

The importance of all of this is quite widely recognized. Alan Greenspan, in his testimony about the economy to Congress, pointed out that "greater worker insecurity" — his phrase — "greater worker insecurity," he said, "is an important factor in the health of the economy, keeps inflation down," — that’s the most important thing for banks and so on — "and the reason it keeps inflation down is because workers are just afraid." They’re afraid to ask for wages and benefits while profits continue to soar to heights that are described as "dazzling" and "stupendous." Actually, the business press has run out of adjectives years ago. And all of this improves the health of the economy by a certain criterion.

How do you achieve all these beneficial results? Well, one is flexibility of labor markets. That is the threat of firing. But there are other measures. So it takes a NAFTA. One effect of NAFTA, which was studied by the labor historian Kate Bronfenbrenner, Cornell, in a study that was carried out under NAFTA rules. Because of labor opposition to what was happening, she discovered that the threat of job — since NAFTA, the threat of job transfer has been used to break organizing efforts in about 50% of cases, which is quite high, and that when organizing efforts nevertheless succeeded, the number of actual transfers tripled after NAFTA, but of course in the mobile industries like manufacturing, not construction. Well, all that’s illegal, of course, but it doesn’t make any difference. I mean, when there’s a criminal state, it doesn’t make any difference if actions are illegal.

State-corporate collusion in criminal activities has other beneficial effects for the economy, so during the Reagan years illegal firing of union organizers went up very fast, about tripled. Also industrial accidents went up very fast, almost doubled, because the OSHA regulations simply weren’t enforced, and that helps the corporate sector, so this was actually reported in some detail in Business Week, the only place I’ve seen an account. All of this helps destroy unions. And destroying unions leads to the essential reforms, namely increasing labor market flexibility with all of its good consequences.

Apart from everything else, there’s a kind of a psychic effect, which is probably hard — which is hard to measure, but it’s undoubtedly severe to loss of security. And I suspect that it’s finding its way into the social indicators, so, for example, into indicators like the sharp increase in child abuse, or child poverty, which is unusually high in the United States and is a form of severe child abuse.

Well, there are other important effects of the contemporary form of globalization instituted by state-corporate power in the past twenty-five years. One significant aspect is undermining popular sovereignty and substantive democracy, and that’s very significant, and understood. The Bretton Wood system, instituted by the United States and Britain primarily in the mid-'40s, regulated — was based on regulation of exchange rates; they didn't fluctuate a lot — and also permitting countries to restrict capital flow.

And there were very good reasons for that. And those reasons were explicit. They were explained and are well understood. The reason is that if free capital flow is allowed, that creates what’s called a "virtual parliament" of concentrated global capital, which can exercise veto power over national policies that it considers irrational. It can exercise veto power simply by the threat of capital flight, which is unsustainable and leads to depression, and so on. What kind of policies are irrational? Essentially those that help people, rather than profits, so labor rights, education, health, stimulating the economy, those things. They can be vetoed by the virtual parliament if capital flight is free. And that was understood, very clearly understood.

In the mid-1940s, when this system was instituted, there was enormous popular support in the United States and elsewhere for social democratic and even more radical democratic measures, and the Bretton Wood system responded to that, responded to that popular mood, a mood incidentally which the business world regarded with very great concern. The National Association of Manufacturers warned that the — quoting — that "the greatest hazard facing industrialists is the rising political power of the masses." They generally use kind of vulgar Marxist rhetoric; it’s not uncommon. The values are reversed, but the assumptions are the same. That led to an enormous corporate offensive to undermine the threat of democracy in the postwar period. That’s been fairly well studied and should be better known. There’s good academic work on it.

The essential point behind all this was brought out in a kind of a dry, academic way, in a very highly regarded history of the international monetary system by Barry Eichengreen. Like others, he points out that before — that the current period of globalization, so-called, is rather like the pre-World War I period by gross measures, a lot of gross measures, looks similar. But there are some differences. And one crucial difference, he points out, has to do with democracy, with popular sovereignty. Quote him, "Pre-World War I, government policy had not yet been politicized by universal male suffrage, the rise of trade unionism, and parliamentary labor parties, so therefore the very severe human costs of what’s called 'financial rectitude' that are imposed by the virtual parliament could be transferred to the general population, who were defenseless. But that luxury was no longer available in the more democratic post-World War II period, and therefore at Bretton Woods, limits on capital mobility substituted for limits on democracy as a source of insulation from market pressures." That captures it pretty accurately, I think.

There’s also a corollary, namely dismantling of the post-war economic system since the mid-'70s has led to a significant attack on substantive democracy, which in fact has happened, not only in the industrial countries, but rather strikingly in the South. There, the effect is enormous. In fact, for about half the population of the South — the developing countries, so called — national — they don't even have control over national economic and social programs. Those are designed by the international bureaucracy under conditionalities imposed by the IMF, which are related by the so-called debt. I say "so-called" because the debt is not a simple economic fact. In large measure it’s the ideological construction. It looks quite different when you view it as an economic fact, though. I’ll explain what I mean if you like, but it’s late, so I’ll stop.

The principle of — let me finish with a final example. The principle of undermining popular sovereignty extends much more deeply than this. A lot of general popular discontent about what’s going on was revealed rather dramatically and importantly at Seattle, and probably will be again in Washington in a couple of weeks. But the basic issues were in my opinion brought out much more clearly and sharply in Montreal in late January. In Montreal, there was an international conference in late January to try to reach what’s called a biosafety treaty, biosafety protocol.

I’ll quote from the New York Times, so you know I’m not misleading you. According to the New York Times account, a rather ambiguous compromise was reached after intense negotiations that often pitted the United States against almost everyone else. What was at issue is what’s called the "precautionary principle." The European Union, which was on the other side, which is why there was a compromise. If it’s only the third world on the other side, they’d just get smashed. But in this time there were two power blocs opposing, so there was a compromise. The European Union defined the precautionary principle like this: countries must have the freedom, the sovereign right, to take precautionary measures with regard to genetically altered organisms that they feel might be harmful. That means the seed, microbes, animals and crops. The United States opposed that. It insisted on the World Trade Organization rules, which are, quoting, "An import can be banned only on the basis of scientific evidence," usually called sound scientific evidence. Whether there is sound scientific evidence "will be determined in a secret panel by representatives of the corporate world."

So, in brief, the World Trade — and this is the fundamental principle of the World Trade Organization. The principle is that people must be denied the right to say, "I don’t want to be an experimental subject." Actually, some of the uglier chapters of the history of medicine have to do with the denial of that right to defenseless people — to slaves, to poor women, to ethnic minorities and so on — but that has recently changed. Now, at least in principle, it’s necessary to get consent forms before you carry out experiments with human subjects. So, for example, if, say, somebody from the Johns Hopkins Medical School walks in here and says, "Look, you guys are gonna be experimental subjects in an experiment I’m carrying out where I’m gonna give you some new drug, or I’m gonna stick an electrode in your brain, or something or other, and see what happens," according to present rules, you’re allowed to say, "No, I’m sorry, I don’t want be an experimental subject."

But according to World Trade Organization rules, you don’t have that right. You would first have to provide sound scientific evidence, to be judged in secret by a panel of corporate representatives that the experiment is going to harm you. And unless you can provide that evidence, you must be an experimental subject. OK? You have no right. That’s the rule. And that was the issue. And for the general population, that right has to be abrogated. That is, they must be experimental subjects, so that US space corporations can achieve dazzling profits, thanks in large part to very large public subsidies and the protectionist devices that are also a crucial part of the World Trade Organization regime.

Actually, these same issues, if you think them through, arise with regard to the so-called externalities that are dismissed. So, unless there is sound scientific evidence that environmental or ecological effects are harmful, then the population of the world must be experimental subjects, as well as future generations that have no vote in the market. That is, international conventions must be kept as weak as possible and ignored as much as possible, unless you can prove — provide sound scientific evidence that you experimental subjects are going to be harmed. You don’t have a right to say, "I don’t want to try," you know? That’s again a crucial principle based on the underlying principle that the rights of people are incidental, and the rights of profit and power to highly concentrated private tyrannies which are unaccountable private tyrannies, which, what they are, are paramount. Those are supreme values often disguised as trade, but that’s not the issue.

Well, there are, of course, beneficiaries to all of this, to these specific forms of sociopolitical and economic organization that are misleadingly called globalization. Among the beneficiaries are those conducting the experiments and relying on the concentration of power to impose them on others. Included also are those who are writing in praise of the institutional structure, its policies, its leaders, just as they’re also praising the leaders of the enlightened states for their virtue and magnificence. The beneficiaries include most of us and the circles in which we spend most of our lives. And for the same reasons we have unusual power. That power provides opportunities, offers choices, and we can hardly fail to understand that the choices we make will have very substantial human consequences today and for future generations.

AMY GOODMAN: Professor Noam Chomsky, speaking at Johns Hopkins University in Baltimore, Maryland — Chomsky is a Professor of Linguistics at the Massachusetts Institute of Technology — speaking about the issue of globalization, as protests continue to erupt around the world, the latest this past weekend in South Korea around corporate globalization.

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