Chomsky on Globalization...

I've been a fan of this author/activist/intellectual/professor for a number of years now and you can find thousands of references for his views on "globalization" all over the 'net in audio, video & text format. But I felt that one of his many Wikipedia articles summed up his views on this issue fairly succinctly:

"Chomsky made early efforts to critically analyze globalization. He summarized the process with the phrase "old wine, new bottles," maintaining that the motive of the élites is the same as always: they seek to isolate the general population from important decision-making processes, the difference being that the centers of power are now transnational corporations and supranational banks. Chomsky argues that transnational corporate power is "developing its own governing institutions" reflective of their global reach [11]. According to Chomsky, a primary ploy has been the co-optation of the global economic institutions established at the end of World War II, the International Monetary Fund (IMF) and the World Bank, have increasingly adhered to the "Washington Consensus," which requires developing countries to adhere to limits on spending and make structural adjustments that often involve cutbacks in social and welfare programs. IMF aid and loans are normally contingent upon such reforms. Chomsky claims that the construction of global institutions and agreements such as the World Trade Organization, GATT, NAFTA, and the Multilateral Agreement on Investment constitute new ways of securing élite privileges while undermining democracy. [12]

Chomsky believes that these austere and neoliberal measures ensure that poorer countries merely fulfill a service role by providing cheap labor, raw materials and investment opportunities for the first world. Additionally, this means that corporations can threaten to relocate to poorer countries, and Chomsky sees this as a powerful weapon to keep workers in richer countries in line.

Chomsky takes issue with the terms used in discourse on globalization, beginning with the term "globalization" itself, which he maintains refers to a corporate-sponsored economic integration rather than being a general term for things becoming international. He dislikes the term anti-globalization being used to describe what he regards as a movement for globalization of social and environmental justice. Chomsky understands what is popularly called "free trade" as a "mixture of liberalization and protection designed by the principal architects of policy in the service of their interests, which happen to be whatever they are in any particular period." [13]

In his writings, Chomsky has drawn attention to globalization resistance movements. He described Zapatista defiance of NAFTA in his essay "The Zapatista Uprising." He also criticized the Multilateral Agreement on Investment, and reported on the activist efforts that led to its defeat. Chomsky's voice was an important part of the critics who provided the theoretical backbone for the disparate groups who united for the demonstrations against The World Trade Organization in Seattle in November of 1999. [14]"
http://en.wikipedia.org/wiki/Politics_of_Noam_Chomsky


If you're interested in more info on this guy check out the following:
overview: http://en.wikipedia.org/wiki/Chomsky
news: http://www.zmag.org/
torrents: http://www.onebigtorrent.org/
official site: http://www.chomsky.info/

 

Well there are those who say that the main problem with the Washington Consensus was how it was implemented and not the principles of it.



The IMF and the Washington Consensus: A Misunderstood and Poorly Implemented Development Strategy.


" However, a more comprehensive explanation as to why the Washington Consensus earned such a poor reputation is that Williamson’s theory, though fundamentally sound, fell into ill regard at the IMF. Cornell Economics Professor Ravi Kanbur has pointed out that, “It might be useful to start with the observation that the Washington Consensus became what it did, not what it said.” Regardless of its architect’s intentions, the IMF systematically and universally applied the most conservative interpretation of the Consensus’ principles, transforming it from a set of broad policy guidelines to a rigid neoliberal development model... "

LINK

---------------------------

If this is the case then I think countries should re examine how neo-liberal policies were implemented. It would be a bad idea to abandon market reforms when it is generally known that they can improve the economy of a country.

 

No matter what reasons we accept for the implementation of these stratigies we do know the effects of the implementation of the models: a greater increase in the disparity between the rich and the poor in those countries, greater profits for American corporations (not the American working class), & an economic model that is not even pretended to be presented as having a democratic nature. The 2001 Agentine economic crash being the prime example: they had implemented these World Bank/IMF strategies and they ended up failing miserably.
It should aslo be noted that the US does not adhere to these strategies which it dictates to other countries through institutions like the World Bank & IMF. We have a heavily subsidized protectionist economy in the US with a nanny state that protects it because that's the only way we can build up the economic/military empire necessary in order to shove this model down the throats of tiny third world countries that are desperate for money and look to the World Bank/IMF for loans.

 

Even though it still has room for improvements,Estonia is becoming a country that others can learn from as far as reforming their economy towards a market one.



" In the post-Soviet era, several former communist countries have enacted pro-capitalist, free market policies that are fueling tremendous economic growth and freedom. This week, Estonia's former prime minister explained the economic miracle that is his country - a country of 17,400 square miles and 1.4 million people with an economy that outshines many of its larger European neighbors... "

LINK

 

Wow, good rebuttle post. To be honest, I didn't know much about Estonian economics until this post forced me to take a look at them.

Well, from my very recent and very limited research of this nation's economy, I would say that this "economic growth" is due to the world increasing oil prices as Estonia's economy is heavily dependent on the market performance of locally obtained "oil shale". Much like how Russia is very dependent on world oil prices for the stability of its markets. As we saw after the end of the Cold War: Russia fell from being a second world country (“socialist” from 1917-1991) to being a third world country when they instituted capitalist reforms in the 1990s. They rebounded a bit with the rising oil prices following the US-led 2003 Iraq invasion, which made oil prices skyrocket. But all in all the capitalist “market” reforms have led to a situation in which Russia now has one of the greatest gaps between the rich and the poor, and also one of the highest concentrations of billionaires on the entire planet; and also a situation in which the livelihood of Russia is highly dependent on how energy markets perform worldwide.

 

Well the focus for Estonia and other countries should be to promote economic policies that will help to attract both domestic and foreign investors to help diversify it's economy beyond one industry.

In order for these market reforms to be effective more economist nowdays recognize that you must first put in place and enforce laws that will support market reforms such as enforcing property rights and the rule of law. This didn't happen in many of the countries that introduced market reforms during the 90's.


Link

Getting back to Estonia. Unlike many of the other former Soviet countries they did their business privatization through oversites which prevented the type of corruption and monopolies that came with the privatization of other former Soviet countries.

 

Well I would certainly like to see more of this Estonian picture. An interesting part to look at would be the fluctuation of the gap between the rich and the poor in that country during this economic growth. After all, the US has the largest economy in the entire world yet we have millions living in poverty. Who’s benefiting from Estonia’s current economic growth?

To your credit, I think looking at “successful” market reformed countries for understanding is a good thing. However, we must also look at other parts of the world too in order to get a complete picture. We should also ask ourselves critical questions about the nature of the dominant institutions of our time.

• Why did the IMF’s poster boy economy for market reform, Argentina, fall to pieces in 2001?
• How does one justify supporting the spread of institutions which are centers of vast private power, accountable to no one, that function in a completely undemocratic manner?
• Why is that people in these third world countries are always told “you should do this that and this with your economy” by 1st world economists, while the first world hypocritically maintains its protectionist policies, such as subsidized agriculture. That doesn’t sound like “free” trade to me.

An example here would illuminate the situation a bit. In the face of falling support polls Bush II decides that he wants to build up his green image to the public. His PR guys informed him this might be a good idea. So he tells Americans that we need to start relying on alternative energies in order to break our “addiction” to oil (“diversify” our energy sources, as economists like to say). All well and good right? Right. But then, what he says we need to do is to begin to run biofuels in our cars. Ok, that’s good. I’d agree with that too. Then Bush says we need to grow more corn and use it for biofuel! Take a look at this chart. Out of the DOZENS of choices, corn yields the least amount of gallons of biofuel per acre! Interestingly hemp yields twice as much, lol. Ok anyway that doesn’t have much to do with the economics in question here and is a bit of a red herring, so let me make my point here. All of this really doesn’t matter so much: it doesn’t matter if it’s Bush II saying it or Clinton saying it or some economist saying it, because the point here is that Mexico’s economy is heavily dependent on maize (corn). It’s their staple crop and Washington knows this, and all the people who pushed through NAFTA know this, and the economists whispering in Bush’s ear know this. So what happens to Mexico’s economy that has been locked in with the rest of the continent to this “free” trade agreement? Well, it’s flooded with heavily subsidized American corn, millions of Mexican farmers can’t compete with the prices and they end up committing suicide or migrating north across the boarder. Meanwhile gigantic US-subsidized agribusiness reaps unspeakable profits. So in this case, “free” trade is beneficial if you’re running enormous corn plantations, or if you’re a politician getting slipped cash under the table in order to continue subsidizing US agribusiness. Bad if you’re a small, non-corporate community farmer in the US who’s not getting a fair piece of the pie. And suicidal if you’re a Mexican farmer.

 

LINK

As far as Argentina's collapse and rebound this link may shed some light.

Most free trade advocates are also against subsidies. They are considered bad because they do distort prices and also they are considered a waste of U.S tax dollars that fund them. So if you are against U.S agricultural subsidies then you will get support from many free trade advocates. I think these subsidies were put in place during the Great Depression for reasons related to those times.


Here's an example of fiscal-conservatives criticizing U.S subsidies:

" When President Franklin Roosevelt first crafted farm subsidies to aid family farmers struggling through the Great Depression, he clearly did not envision a situation in which these subsidies would be shifted to large Fortune 500 companies operating with 21st century technology in a booming economy... "

LINK

 

Yes, if you'll read a little further down that link did highlight some of my points. The IMF wanted to keep Argentina in debt by tempting Argentina into changing its laws in order to get loans, which would of course have interest attached. This becomes a vicious cycle for these 3rd world countries in which they are constantly indebted to the IMF & continually have to borrow money with more interest. The crash was also caused by “IMF-induced budget restrictions — which undercut the government's ability to sustain national infrastructure even in crucial areas such as health, education, and security.” It’s no secret that the IMF was largely to blame for the fatal crash, that lead to the deaths of “450,000 Argentines… between 1990 and 2003”.

Here's a documentary source of the Argentine case.

And another for the Jamaica case.

I’m not against agricultural subsides in certain contexts. And I’m not entirely against free (and fair) trade as advocated by people, like a fringe conservative group, who understand the meaning of the word “free”. So, for instance, since I live in a “red state” I will probably vote for Republican candidate Ron Paul in 2008 who, IMO, understands the meaning of free trade (though I disagree with him on some other issues). What I’m mostly speaking out against are neoconservatives, like Bush II & Co, and free market liberals, like Thomas Friedman who are the cheerleaders of such sick policies promoted by the World Bank/IMF/US Treasury Dept. as “free” trade for the rest of the world, protectionism for America. What this amounts to is neoimperialism plain and simple. Huge US multinational corporations (“unaccountable private tyrannies” –Chomsky) with the help of the nanny state go in and just loot the shit out of the third world. They’re vastly more efficient than monarchs of centuries past, they profit on an unprecedentedly large scale, and they aren’t held accountable for any of their actions which wreak havoc on the environment and the humans living in those environments because the laws of the host country have been significantly weakened due to IMF mandates. Not to mention the fact that even if the country tries to fight back in self defence then the multinational can easily pick up and move on to the next desperate 3rd world country.

Anyway, all of this is really secondary to my main concern, and that is that all of these institutions: the World Bank, the IMF, multinational corporations are completely undemocratic in form. The billions of people that are affected daily by these institutions have absolutely no say in how they operate. And that, my friend, is dangerous.

 

Argentina & IMF

Abolish The IMF

It should be pointed out that neither the IMF or World Bank are considered representatives of free market capitalism on the part of those who promote capitalism. Both organizations are viewed by many pro-capilatist as basically welfare agencies who do give bad advice to poor countries and too often give loans to corrupt governments. So even among actual pro-capitalist you won't get much disagreement for criticizing the IMF.

 

They are both also a vital part of neoliberal corporate-sponsored globalization and they both play a major role in determining world policy.

Again, the conservatives and capitalists that you are referring to are fringe groups that do not have the same power and influence on policy as these institutions, and they never will so long as the IMF/World Bank stay in power and keep themselves in power by continuing these policies and staying tied to the elite (who are a certain type of capitalists) who support them.

 

Intelligent discussion guys. I've learned a lot from reading all the posts.

 

I have read examples of economist pointing out that many of these countries don't have to even borrow money from the IMF or World Bank. The money these countries need can be borrowed from the capital markets instead. Also another thing contributing to some of these country's debts is the fact that they have corrupt gov'ts who have squandered these loans from the IMF & WB.

 

You’re right. They don’t have to borrow the money; which is why Argentina, Venezuela, etc. no longer do it. But many times they are pressured into it. And sometimes they are so desperate for money, and with the IMF/World Bank/Treasury Dept. always portraying themselves as the saviors of the 3rd world, that they don’t give a thought to the interest/interest rates. That or they assume that they will be able to pay it off from the benefits of having foreign investors create more wealth in their economy and whatnot. But what happens is that the money that these multinationals make flows right back into the hands of those running the multinationals (90%+ of them in the US of course), and when they’re done with their tax free time slot they pick up and move to the next desperate 3rd world country. There’s plenty of corruption and fraud in capital markets too.
There are certainly corrupt 3rd world governments. Most of them are corrupt in that they are usually still remnants of power left over from corrupt Western colonialism. In fact, many of the elites that are currently in power in those countries are the same people/families that were tied to the colonial powers of Europe and America. This is another reason that they choose to align themselves with the IMF/World Bank/Treasury Dept. What’s good for Western elites is good for 3rd world elites and vice versa. Frankly, they don’t give a shit about what happens to their country/countrymen. They never have.

 

Great, this is exactly what we need. The more informed people are on these issues the more we can evolve into a truly democratic & peaceful society.

Don't miss out on the references & links... by both of us. They really give more indepth understanding of the issues at hand here.

 

Read all the links, that's why I made my entry. You've both been very thoughtful and informed and civilized about your disagreements.

 

this discusion reminds me a lot of an interveiw between amy goodman (of democracy now) and john perkins (author of confessions of an economic hitman) were he describes the tacticts that are used to convince 3rd. world or other countries to exept loans that can not possibly be repaid thus giving control of their economies, to the lender not to mention control of their natural resources,govermental polacies, and the like! the interveiw is available at www.democracynow.org , i would give a link but i dont know how! and please excuse my spelling!

 

well at least that one works, once there just search john perkins, anyone wanna pm me about making links ??

 

I watch Democracy Now, whenever I can get it tuned in. No cable here nw. I think it's one of the most objective sources of information out there.

I think this may have been one of the links you were after:

http://www.democracynow.org/article.pl?sid=04/12/31/1546207&mode=thread&tid=25

 

yes gardener that is the one i was refering to! thank you! i have yet to read the book but have every intention, i am not at all schooled in economics but i also think this trend of manipulating countries can lead to a more insidieous problem whitch is of more of a imiediat threat to humane kind, it for a differnt thread, and i have tried to open the disscussion, intulecual biological property laws,!! please join me when i get it going again!!