History of the world economy|
The Global Pillage: Whose "world economy" is it, anyway?
By Tim Wheeler
In the People's Weekly World,
9 November 1996
NAFTA and the World Trade Organization (WTO) are tools with which
powerful corporations manipulate the "free market" to control the
flow of goods and money around the globe. The terms of these
treaties are subject neither to local nor to national law but to
the decisions of their boards of directors which answer to
corporate masters. The same may be said of the World Bank (WB)
and the International Monetary Fund (IMF).
These institutions determine who receives how much credit and
when - conditional on the implementation of neoliberal policies
specified by the suppliers of capital - again the powerful
transnational corporations. When loans are contingent on the sale
of natural resources and the privatization of state enterprises
with the corresponding dismissal of public workers, countries
become unable to develop their own economies and their burden of
debt increases until it is, for all intents and purposes,
unpayable. Burdened with debt and unable to make long-term
investments in their own futures they are obliged to import the
basics of life. Corporate concentration of capital thus proceeds
apace, dividing us into a shrinking world of privilege astride a
huge and growing world of abject poverty. Unless public
boundaries are placed on this flow of private capital,
concentration will continue and at its end is disaster, as surely
for the fortunate few, as for the oppressed billions.
That the world's governments and leaders are not unaware of this
disastrous course of events was evidenced at the World Summit for
Social Development held in Copenhagen, Denmark in March 1995.
Present for the largest gathering of world leaders held until
that time, 117 heads of state "pledged to make the conquest of
poverty, the goal of full employment, and the fostering of
stable, safe and just societies their overriding objectives." The
over 14,000 people who participated in the summit included
representatives of 186 countries and 811 non-governmental
organizations and some 2,800 journalists.
Because over one billion - 20 percent - of the people on earth
live on the equivalent of less than $1 a day, the summit
governments declared 1996 the International Year for the
Eradication of Poverty and committed themselves to that goal in
the summit's Declaration and Programme of Action.
Each government pledged to develop a national poverty eradication
plan that would promote sustained economic growth in a framework
of "sustainable development and equal opportunity." The plan
would expand productive employment, using policies for full,
decently paid and freely chosen work.
The governments pledged to protect human rights and promote
social integration, committing themselves to halting today's
extreme social polarization and burgeoning urban shantytowns and
to ending the illicit trading in arms, drugs and in human beings,
especially women and children. They committed themselves to work
toward attaining gender equality and equality before the law,
toward ensuring access to control over economic and social
resources and activities to disadvantaged and vulnerable groups
and to protecting the rights of the indigenous. Finally, they
agreed to strengthen cooperation for their social development
plans through the United Nations.
Each year the U.N. issues a Human Development Report in which it
quantifies national development according to an Index with three
key components: longevity, measured by life expectancy at birth;
knowledge, based on literacy rates and schooling; and standard of
living, measured by purchasing power based on Gross Domestic
Product (GDP) per capita adjusted for cost of living.
Seen in this framework the aims of the Copenhagen Summit include:
primary health care, particularly of women and children; family
planning services including prenatal care; safe drinking water
and an end to malnutrition; universal and equitable access to
education for all children with particular attention to schools
in rural areas, and to the children of migrant or nomadic peoples
and the indigenous; and increased adult literacy, particularly of
At the end of the summit meeting the governments also committed
themselves to ratifying and implementing the 1990 Convention on
the Rights of Children. These pledges must now be ratified and
implemented in each country. Only action on the part of local
grassroots organizations will exert the pressure necessary to
obtain ratification in each country.
The riches to resolve these problems are clearly not lacking. To
raise the requisite funds some of the following might be
A transaction tax on speculative foreign exchange. This "betting"
on the futures of currencies and international notes moves $1
trillion in the world's financial markets every day - more than
the value of all the purchases and sales combined. Such a tax
would slow purely speculative capital investment; the trading
firms dealing in precisely such transactions generate more income
than any other "industry." First proposed by James Tobin, 1991
Nobel Prize Winner in Economics, an 0.5 percent tax would
generate over $1.5 trillion a year.
A globally agreed-upon limit to the interest specified for
international loans made to developing countries. This would make
credit more readily available to those who most need it. Loans
should not be contingent of the sale of state-owned enterprises
or land, rermoving subsidies on food or the dismissal of public
The complete cancellation of the foreign debt of developing
countries has been suggested and some debt has, in fact, been
forgiven. Complete cancellation is not likely, given the
intransigence of transnational corporations and the international
financial agencies such as the World Bank and International
Monetary Fund. However cancellation of the interest payments due
on those debts should be considered. The money thus released
could be earmarked for social development.
A globally agreed-upon rate for the taxation of profits taken out
of developing countries. Three quarters of this tax could revert
to the developing country; the remaining quarter could be
directed to a world body such as the UN's Food and Agriculture
Organization, or its Children's Fund or to a U.N. operating fund.
Each nation should commit itself to cutting its military and arms
budget until that budget reaches no more than ten percent of its
total national budget. In 1992, world military spending - $815
billion - equaled the combined income of 49 percent of the
world's people. A mere 3 percent annual reduction in this
spending would yield a "peace dividend" of nearly $460 billion by
the year 2000. In his Agenda for Peace, U.N. Secretary General
Boutros Boutros Ghali proposed a tax on the defense budgets of
industrial nations to finance the U.N.'s emergency peacekeeping
Parallel to those cuts, the nations which possess nuclear
stockpiles should commit themselves to cutting those stockpiles
by half each year for 10 years after which the remaining
stockpiles should be completely destroyed. Part or all of the
money recovered by these two measures could be channeled to an
international development fund so that the world's people could
truly "beat their swords into plowshares."
Since capital flows freely across national boundaries in search
of opportunity, labor must be able to do likewise. Developed
nations must reach agreements with developing nations for the
provision for workers who migrate from the latter to the former
in search of employment. At the same time, the world's nations
must agree to a minimum standard for wages.
The implementation of these last two measures ought to be seen as
goals: they will only be possible when the previous points have
been addressed and implemented. That they will be depends on just
how firmly we believe that where there is a will there is a way.
As has so often been said, it is not money which is lacking but
-Julia Lutsky contributed to this article.
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