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Alternatives to Neoliberal Globalization |
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by Jorg Huffschmid
Email: mbatko (nospam) lycos.com (verified) |
28 Dec 2004
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All the alternatives begin with resistance against the neoliberal globalization that is increasingly aggressive and openly violent. The essential levers are redistribution from top to bottom and aneconomic policy promoting employment. |
ALTERNATIVES TO NEOLIBERAL GLOBALIZATION
By Jorg Huffschmid
[This December 7, 2002 address at the Kassel Peace conference is translated from the German on the World Wide Web, http://www.uni-kassel.de/fb10/frieden/rat/2002/huffschmid.html.]
The connection of neoliberal globalization and militarization will be our theme. This connection is neither accidental nor inevitable. The aggressive form of globalization develops toward external military aggressiveness and internal police state security. On the other hand, political pressure can lead to preventing war and securing and developing democratic structures. The following five theses illustrate this.
1. GLOBALIZATION AS AN ECONOMIC AND POLITICAL PROCESS
Thesis: International expansion is a basic tendency of every society where the means of production are mainly in private ownership and coordination of production occurs through the market and competition. The driving force for decisions on the production of goods and services is private profit. At the same time internationalism is always embedded in a social and political context marked by other interests and democracy. The basic economic tendency supports, strengthens or weakens and determines the form of internationalism.
This basic economic thesis sounds dogmatic but is true and should not be ignored.
Businesses must assert themselves on the market against other businesses in a capitalist market economy. Through the development of the productivity of human labor, more and cheaper products are sold with the same or less work volume. Simultaneously the social pecking order causes productivity to rise more than wages. This leads again and again to the situation that the increasing quantity of goods cannot be sold and therefore no new investments are made. The results are economic recessions and long-term development obstacles since these recessions are never completely corrected.
One important way out of these crises and blockade tendencies – besides intensified rationalization, concentration and centralization – is international expansion. Its core is selling abroad the part of production that cannot be sold or isn’t marketable on account of deficient demand. This expansion creates the possibility of gaining raw materials abroad for extending and differentiating its own energy- and raw material-intensive production. Lastly, profits are invested abroad that cannot be profitably invested at home.
Thus international expansion is not the result of a pressure for international division of labor benefiting all participants. International expansion is the result and watchword of the functioning mechanism of a capitalist market economy. This is a basic economic tendency.
However no economy exists without politics. Other social forces and interests enter into politics beside economic interests and driving forces. The actual development of capitalist societies depends on the extent and form of the interests of private owners. Both depend on the strength and orientation of other social forces, especially the working class movement, the women’s movement, the environmental movement, farmers, intellectuals etc. Lastly, the extent and form of the enforcement of capitalist interests depends on the development of parliamentary democracy, the influence of non-parliamentary democratic movements and international relations between countries. As everybody knows, dramatic changes have occurred here in the last 20 years.
2. WHAT IS NEOLIBERAL IN GLOBALIZATION TODAY?
Thesis: We are at the end of a phase of competition- and financial market-driven internationalization carried out with economic and non-military means. This phase superseded a globalization of the western world supported mainly by reform policy and contradictory and not entirely voluntary international cooperation and stimulated a process of counter-reform on national and international planes. The problems and difficulties of this financial market globalization have led to openly violent forms of development. Economic and social aggressiveness is increasingly supplemented by external military aggressiveness externally and internal police state aggressiveness.
Three phases of the development after the 2nd World War can be identified:
The first phase which is often incorrectly called the Golden Age was defined by an international and social hierarchy of power favoring progressive forces (Soviet Union, working class, experiences of war and crisis). This led to positive developments:
• de-colonialization and the awakening of developing countries: a new international world economic order was generally accepted
• full employment policy and social reforms in capitalist countries
• international cooperation under leadership of the (not unselfish) US.
A harmonic world order without conflict did not arise. World politics was marked by the Cold War, the great influence of the military-industrial complex in the US, nuclear armament and by militant anti-communism in domestic policy in capitalist countries and by increasing de-democratization in socialist countries. The economic and social advances were not agreed at the round table but achieved in harsh conflicts.
Since the beginning of the 1970s, there were growing economic problems that demanded a comprehensive answer. An historical alternative existed at that time: continuation or gradual withdrawal of reforms or counter-reforms.
This question was decided on the basis of the unfavorable balance of power in favor of the neoliberal counter-reform. This counter-reform began at the middle of the 1970s and accelerated from the end of the 1980s through the collapse of countries. Developing countries were subject to the Washington Consensus and subordinated to the interests of the industrial countries. In the developed countries, the neoliberal counter-reform represented a frontal attack on the achievements of the 1950s and 1960s: massive social cuts, privatization of public services and redistribution in favor of profits. The liberalization of financial markets and the related de-stabilization and disciplining were very helpful for capital. The result of this counter-reform was an enormous polarization between the North and the South and in the South and in the North. The relation of per-capita income in the top-bottom fifths of the countries was 1:30 in 1960 and 1:78 in 1998. Unemployment and poverty also rise in the core capitalist countries. The US profited from the crises.
This counter-reform first brought great advantages to capital. Profits boomed. When the profits no longer rose in production, they were realized for a while in speculation.
This boom could not continue endlessly. The problems appeared clearly at the end of the 1990s. The developing countries are in a deep crisis and produce less and less. Distribution conditions block growth and employment in the centers. The speculation bubble burst and passed into a deep stock market crisis. Resistance internationalizes, Seattle and so forth. What will happen now?
The position of the US is very important. On one side the US is economically strong and on the other side this good position is extremely vulnerable. The US has a balance of payments deficit that grows year after year and is financed through indebtedness. This position is only tenable if the US successfully maintains the position of the dollar as the undisputed world currency Nr. 1. Since this is not economically possible, it must be enforced with political and military means. This is the most important background for the increasingly open militarization of American foreign policy. The US aims at stabilizing its own energy-intensive production mode and way of life and simultaneously holding competition in check.
The question of the historical alternative is now raised again. Will the counter-reform pass over to increasing militarization or can it be stopped and replaced by a policy of democratization and balance?
As in the 1970s, the main tendency goes in the wrong direction. The reactionary-aggressive tendency of neoliberalism is increasingly obvious and replaces the seemingly nonviolent power structures and processes. The war in the 1990s and the imminent Iraq war are clear signs of this.
3. PROGRESSIVE ALTERNATIVES TO NEOLIBERAL GLOBALIZATION
Thesis: All the alternatives begin with resistance against the neoliberal and increasingly aggressive and openly violent globalization. The visions expressed in this resistance are the opposite of the concrete reality. The challenge is casting bridges from resistance to the visions through long-lasting concrete changes on the three planes of alternatives.
ALTERNATIVE 1: RESISTANCE
Resistance is always present. With the clear formation of neoliberal polarization, resistance has become intensive although the hierarchy of power altogether has clearly shifted to the right.
Resistance is heterogeneous and develops in different parts of the world:
• The Zapatistas resist land robbery, destruction of their cultural independence and annexation in the neoliberal world market context.
• The great demonstrations of Seattle, Genoa and Washington at the edges of the summit meetings of the G7/8 governments and international institutions of the North protest against the misanthropic policy of these governments. The economic and political elites of capitalism could only meet separated from people by high barriers and under massive police protection.
• European people affected by social cuts resist. In 2002 alone there were three general strikes organized by unions in Spain and Italy against the dismantling of industrial safety and protection against unlawful dismissals and in Greece against privatization of the pension system and its abandonment to the risks of the financial markets.
• People in the US are beginning to resist the war policy of the American government that pursues consolidation and stabilization of its economic and political hegemony under the pretext of the struggle against terrorism.
ALTERNATIVES 2: VISIONS
The visions produced in these movements are often simply the negation of experience:
• Peace, reconciliation and cooperative civil life instead of military intervention
• Democracy, participation and public nature instead of powerlessness, helplessness, intransparency and subjugation
• Justice instead of injustice, exploitation and polarization
• Full employment, social security, prosperity and solidarity instead of individual rivalry, endless positional competition and the race for international competitiveness
• Healthy air and food for ourselves and our children instead of poisoning and ecological destruction.
ALTERNATIVES 3: STEPS TO CONVERSION (ALTERNATIVES IN THE NARROW SENSE)
What is central is not designing a complete plan at the green table and then implementing it step by step. Renouncing on working out concrete alternatives with the argument that these will be produced in the movement is also not sufficient. This renunciation is occasionally propagated in the global justice movement. Developing new demands again and again in the social movements and changing them according to need is important. Nevertheless renouncing on the idea of plausible and reasonable alternatives as long as they aren’t demands of the movement makes no sense. If the people are with us against the war, they want to know how we will peaceably settle international relations and counter international terrorism. When we protest and mobilize against the surrender of the social security systems to the mammoth financial conglomerates, people want to know how we conceive the security of pensions in an increasingly aging society. Developing these alternatives is necessary to gain credibility and advance the social movements. Whoever sees that things are developing badly and understands why this is happening and that alternatives exist will be ready for long-term engagement.
4. DEMOCRATIC ECONOMIC POLICY AS THE CORE OF ALTERNATIVES TO NEOLIBERAL GLOBALIZATION
Thesis: The core of a medium-term alternative to neoliberalism is a new democratic orientation of economic policy in the capitalist centers. On one hand, economic policy must help countries of the third world in starting an independent development. On the other hand, the policy of international expansion pressure must be softened and remedied. The essential levers are redistribution from top to bottom and an economic policy promoting employment. Both can be tackled in the short-term through public employment programs, reductions in working hours and a tax policy strengthening the public sector. Far-reaching institutional changes toward more democracy in the economy are necessary in the medium term.
This strategy does not aim at preventing international trade, international capital transactions and international investment streams.
The strategy aims at preventing internationalization pursued as the solution for problems of mammoth corporations in the centers at the expense of developing countries and ruthless destruction of nature. Rather international trade, investments and other capital transactions must be practiced so both sides benefit and nature remains intact. This is not possible by merely opening markets or political and military subjugation.
Regarding world economic equalization, this strategy requires supporting independent development of the countries of the third world and changing the priorities for development in the centers.
The development of the countries of the third world after centuries of colonialism and post-colonial exploitation is not only an affair of these countries themselves because they cannot overcome their grave economic and social problems in the foreseeable future without support. The centers are obligated in four ways.
• From the financial side, the main part of the uncollectable debts for most countries should be cancelled. Public development assistance should be raised to at least 0.7% of the gross domestic product of industrial countries (presently less than half that amount) and revenues supplemented by a tax on currency transactions (the famous Tobin tax).
• Secondly, industrial countries should finally open their markets for the products of developing countries in the framework of a developing international division of labor. A targeted political structural adjustment- and conversion policy in the industrial countries is also necessary.
• Thirdly, the countries of the third world should have the possibility of developing in regional alliances and protecting their regions against all kinds of free trade rules and speculative attacks. The corresponding possibilities of the WTO (World Trade organization) should be utilized to the full extent.
• Fourthly, the great international institutions should be reformed as to the right to vote and determination of projects so the influence of developing countries will become much greater and independent development will have priority over servicing debts.
The economic strategy in the centers and for the centers is ultimately decisive for the question about the direction of development in the world. Technically speaking, the aggressive world market strategy should be superseded by a domestic market strategy. The pressure to international expansion at any price should be reduced and yield to a regulated international division of labor. This is not a technical problem but an eminent political problem at whose center is the redistribution of income and the democratization of economic control and decisions.
Technically speaking, this involves the genesis and subsequent aggressive use of economic surpluses appropriated by businesses as profit and then on account of insufficient demand no longer spent as productive, employment-friendly and prosperity-enhancing investments but as obsessive export or speculation capital to foreign assets and financial markets. Speaking less technically, the strategy involves correcting an enormous redistribution that occurred in the last quarter century to the burden of wages and salaries in favor of profits. This redistribution is the cause of growth weaknesses, high unemployment and the explosion of financial markets in the last 25 years. Therefore distribution conditions must be corrected so profits are again used according to the economic theory, that is for financing investments and promoting economic development. The financial markets should fulfill their original function of financing investments.
This correction can occur through higher wages or higher taxes on profits and property. Both are sensible and useful in stimulating aggregate economic demand. Higher wages lead to higher consumption. Higher taxes on profits and property allow greater expenditures for states. These expenditures are not automatically applied for human benefits. Therefore redistribution should be supplemented through greater democratic influence on state economic- and social policy in favor of the public infrastructure, education, health care, social security and the ecological reconstruction of our industrial society, not for more armaments and corporate subsidies. An economic reorientation in this sense could lessen the pressure for international expansion and make possible a fair international division of labor.
Governments cannot carry out this change in policy of their own free will but only under the massive political pressure of social movements…
Europe is occasionally emphasized in official declarations as an alternative to the aggressive American model of development. However this is hardly seen in the practice of European politics. On the other side, criticism and resistance against neoliberal globalization is increasing in Europe. The European Social Forum in Florence in November 2002 revealed the unity of the struggle against the war preparations of the US and resistance against the privatization and surrender of social security to the financial markets and against dismantling democratic rights of protection and participation. Supporting and continuing this struggle and working out, discussing and propagating a different strategy of economic and social development are urgent tasks of progressive forces in German and Europe.
The immediate pressing challenge is preventing the threatened war that would be another dangerous step on the way to a world structured only by military strength and subjugation.
The fact that the red-green coalition in Germany won the election in September on account of a relatively clear rejection of German involvement in the American war is encouraging. Nevertheless we cannot trust the German government to keep this position and act correspondingly. In this regard, the withdrawals and appeasements are outrageous. Still it is encouraging that war is widely rejected in Germany as a means of politics. We can and should build on this conviction. Our chances for a lasting success will grow as we make clear that the policy of social cuts and militarization are interdependent and that the resistance against militarization and social cuts or the struggle against war and for the introduction of a property tax go together. |
See also:
http://www.mbtranslations.com
http://www.corpwatch.org
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