Monday, October 06, 2003

The Corporatocracy

Two major NGO's, IFG and NEF have now published thorough and intelligent counter views against the prevailing "Washington Consensus" IFI's (international financial institutions). Ph.D. economist David Korten is the lead editor of the IFG's [international forum on globalization] report/book, "Alternatives to Economic Globalization," while Nobelist Joseph Stiglitz and ex-World Bank economist Herman Daly are lead contributors of the NEF [new economic foundation] book "Real World Economic Outlook." These are both stinging indictments of the failed Bretton Woods Institutions - failed as is obvious by the recent crises history of the `90's and on into today.

David Korten's group of nineteen have attributed most of the blame in multinational corporations, while to be fair there is plenty of blame here for the failed Bretton Woods system and politics, their overwhelming emphases are on the worst violation prone big corporations. On the other hand Stiglitz, Daly, Pettifor, and others at NEF have laid most of the blame on politics and bankers from the `60's to the present day. Here is a short excerpt from their work:

....A cycle of illusions

How did we get into this mess? Real World Economic Outlook challenges standard explanations for the launch of the "globalisation" experiment. We contest the view that "deregulation of capital flows" - the very core of the "globalisation project" was brought about by a form of "spontaneous combustion" caused by new technology. Nor do we share the view of many activists that globalisation is "corporate-driven."

Instead, we argue, globalisation was triggered by elected politicians, and central bankers, in both the US and the UK. In the post-Vietnam war era, led by Richard Nixon and later Ronald Reagan, these politicians sought ways to avoid making the "structural adjustments" necessary to the American economy if debts incurred by foreign wars were to be repaid by US taxpayers. Rather, these politicians preferred to disband the existing system of paying off debts by exchanging gold, and opening up capital markets, so that the US could borrow to pay off its debts. ...{article link continued}

The strongest point of Korten's group's argument is made in the new/old word "subsidiarity", meaning "renationalization of capital" and the "community rooting of capital for the development of national and local economies", oddly enough stated best by the other group's economist Herman Daly, below:

....The model of international community upon which the Bretton Woods institutions rests is that of a "community of Communities", an international federation of national communities cooperating to solve global problems under the principle of subsidiarity. The model is not the cosmopolitan one of direct global citizenship in a single integrated world community without intermediation by nation states. To globalize the economy by erasure of national economic boundaries through free trade, free capital mobility, and free, or at least uncontrolled migration, is to wound fatally the major unit of community capable of carrying out any policies for the common good. That includes not only policy for purely domestic ends, but also international agreements required to deal with those environmental problems that are irreducibly global (C02, ozone depletion). International agreements presuppose the ability of national governments to carry out policies in their support. If nations have no control over their borders they are in a poor position to enforce national laws, including those necessary to secure compliance with international treaties.

Cosmopolitan globalism weakens national boundaries and the power of national and subnational communities, while strengthening the relative power of transnational corporations. Since there is no world government capable of regulating global capital in the global interest, and since the desirability and possibility of a world government are both highly doubtful, it will be necessary to make capital less global and more national. I know that is an unthinkable thought fight now, but take it as a prediction-ten years from now the buzz words will be "renationalization of capital" and the "community rooting of capital for the development of national and local economies", not the current shibboleths of export-led growth stimulated by whatever adjustments are necessary to increase global competetivness. "Global competitiveness" (frequently a thought-substituting slogan) usually reflects not so much a real increase in resource productivity as a standards-lowering competition to reduce wages, externalize environmental and social costs, and export natural capital at low prices while calling it income. ...{article continued}

Obviously, these two groups share many of the same ideas, even though they see different causes, results, and cures. I have to say after reading NEF's extensive reveiws and IFG's complete book, that at this time I would highly recommend reading both thoroughly. There is a tremendous amount of needed information offered, that will be required to rebuild this very shaky system, should or when it collapses of its own abuse.

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