July 27, 2017

The Death of Globalisation

From Fourth World Review version No 98, 1999


There are today no effective institutional methods for ‘policing the global environment’. To the extent that the global environment will be ‘policed’ at all it is only likely to be by mass social movements. This will become easier as the global economy starts to break down. I do not see the development of the global economy as irreversible. The global economy is highly vulnerable and contains the seeds of its own disintegration.

Whenever a third world country accepts a structural adjustment loan, and hence the imposition of a structural adjustment programme, it has in effect delegated the task of running its economy to a foreign, non-elected body sitting in Washington, DC. That is hardly democratic. As Julius Nyerere, when Prime Minister of Tanzania, once said, ‘I have the authority but I do not have the power.’ The same is true of those countries that join the World Trade Organisation, for the first article in its constitution states that all member governments must adapt their laws to those of that organisation, a non-elected organisation that has set itself up as a sort of world government whose laws have total precedence over those of its member nation states.

Needless to say, if the Multilateral Agreement on Investments (MAI) that is at the moment being frenziedly promoted by the Organisation for Economic Cooperation and Development (OECD) were to be adopted, we would have strayed still further, if that is possible, from all known democratic principles. Indeed, the OECD proposes that it be made illegal for national governments to pass any new laws, if this leads to a reduction in the profits of any transnational corporations. Already the Ethyl Corporation of America is suing the Canadian government for $250m for passing a law that reduces that corporation’s profits by banning a toxic additive to petrol that it manufactures. This perfectly outrageous proposal is to do more than subordinate the authority of national governments to an international agency: it is to subordinate it to the interests of an individual transnational corporation. A less democratic proposal is hard to imagine.

Even at a national level, an effective environment agency has yet to be set up. The Ministries of the Environment that now exist in most European countries do very little. They are invariably forced to toe the government line on all major issues. Anything they propose that adversely affects the government’s economic priorities is automatically rejected. As far as I know, the only environmental agency with any executive powers at all is the Environmental Protection Agency (EPA) in the USA, which has a budget of US$2 billion. However, this is but a minute fraction of what it would need to control the environmentally destructive activities of the vast transnational corporations it was set up to control.

Thus, among its duties is to examine the 70,000 or so chemicals already marketed in the USA, for their potential adverse health effects, as well as a thousand or so new ones that are put onto the market every year. But after many years it has only succeeded in examining—in a cursory way at that—little more than about 5% of these chemicals. Some 95% of those that are still on the market have thus never been tested at all. What is more, when it does establish that a particular chemical is carcinogenic, the EPA is incapable of forcing the corporation that produces it to take it off the market. All it can do is negotiate with it, and from a position of weakness rather than strength.

If no institution can control environmental destruction and protect the public’s health at a national level, what chance is there for setting one up at an international level? If we look at the experience of the United Nations Environment Programme (UNEP), we can see how hopeless the task really is. The UNEP, which was set up after the United Nations first Conference on the Environment in Nairobi in 1972, was given no executive powers of any kind. It could only act via other United Nations agencies, and to reduce its capacity to do so it was conveniently located far away from them in Nairobi, and, what is more, given an annual budget of a mere $70 million—a third of that of an nongovernmental organisation such as the World Wildlife Fund.

Unfettered destruction

In any case, the problems we face today are too massive and too deep-seated to be solved by any institution. Environmental destruction, in spite of assurances to the contrary by scientific experts working for governments and international institutions, is entirely out of control. For instance, there is absolutely nothing today to prevent the ever increasing destruction of the world’s forests—that is until it becomes ‘uneconomic’ to destroy any more. Nor can I see anything to stop the erosion of the last inch of topsoil from what remains the world’s dwindling agricultural land so long as there is a market for its produce. Nor, in spite of the World Climate Conference held in Kyoto, is there anything to prevent the further growth of C02 emissions to the atmosphere and the further destabilisation of world climate, that is so long as there is a market for fossil fuels.

Let us face it, there is no law in any country—to my knowledge—that makes it is illegal to clear-cut forests, nor to erode our topsoil, nor to generate greenhouse gases over and above that which can be absorbed by dwindling natural sinks. What is more, even if such laws were enacted, I can see no effective mechanism anywhere in the world for applying them.

At the recent World Climate Conference at Kyoto, governments committed themselves to reducing carbon dioxide emissions by 5.2% below the 1990 level by the year 2009-2012. Whether they actually do so or not is largely irrelevant. The scientific working group of the Intergovernmental Panel on Climate Change (IPCC) told us in its first report in 1990 that in order to stabilise world climate, we would have to cut down emissions of greenhouse gases (of which carbon dioxide is the most important) by 60% to 80%, and do so immediately, not in 20 or 30 years’ time.

If, on the other hand, we did nothing, the world would become on average 1.5-4.5 degrees hotter by the time the carbon dioxide content of the atmosphere doubled, which should be around the year 2020 and 2030.

Few people seem to realise what a truly terrifying prospect this is. Man has never lived in a world that is 4.5 degrees hotter. In addition, what we are seeing today is not just global warming but global climatic destabilisation with an increase of droughts and floods, of heat and cold, and also of the unpredictability of weather conditions, which will make agriculture, in particular, increasingly difficult. What is more this is only the beginning.

As governments have in the meantime done practically nothing to reduce emissions, it will now be impossible to prevent the doubling of the C02 content of the atmosphere. All we can do now is slow down any further change, and slowly at that. But is this enough? Are we even going to slow it down? Who is going to make us do it, especially against the massive opposition from the incredibly powerful oil lobby? The answer is no one.

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Heat is on

A mere 5.2% reduction below the 1990 level by the year 2008-2012 would have but an insignificant effect on global warming, which will just keep increasing at an unpredictable rate, especially in view of all the likely possible feedbacks (i.e. small changes that can lead uncontrollably to ever bigger and bigger changes)—changes that being speculative and unquantifiable are very difficult to take into account in the mathematical models built by the International Panel on Climate Change (IPCC). In any case it may be that we can adapt, at least in certain areas of this planet, to a world that is 4.5 degrees hotter, but can we adapt to a world increasingly hotter than this, and whose climate is becoming ever more destabilised?

Let us not forget that by signing the last GATT agreement, we have rendered any law that can be shown to interfere with trade vulnerable to being classified as a ‘non-tariff barrier’ and made GATT-illegal. This includes most laws required to protect the global environment.

Let us not forget, either, that if the MAI is signed, such laws, by reducing the profits of the logging industry, agribusiness and the oil and motor industries, would inevitably be judged illegal—and the governments that enacted them would have to pay a massive compensation to those corporations whose profits had thereby been reduced.

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Matter of time

If environmental destruction is out of control, what then is likely to happen? Clearly something must in the end bring it to a halt. It cannot just continue increasing forever. In all probability economic collapse will do so. Walden Bello, the Filipino economist who is a member of the IFG, believes that the breakdown of the South American economy some 10 years ago, the collapse of the Mexican economy four years ago, and that of the Far East, will necessarily be followed by other collapses, possibly that of China or Russia, and ultimately that of the USA. For him this is merely a matter of time, for all these collapses are merely symptoms of the same economic disease: uncontrollable economic development and speculation, that is now occurring on a global scale. When the American economy collapses, of course, that will mean a general collapse, one too that will be incomparably more serious than that which took place in 1929, as it is not just the rich who have invested in the stock exchange, but a large number of relatively poor people, including many old age pensioners. This collapse will be very painful, but it would at least reduce the money available for funding further environmental destruction. Already a number of highly destructive infrastructure projects are being cancelled in the Far East, including the Bakun Dam in Sarawak, and there will undoubtedly be very many more.

On the other hand, if this collapse does not occur in the next few years and economic globalisation persists, we will have to face the terrible problems that it must necessarily bring about. The first is worldwide poverty on an unprecedented scale. The global economy is already creating considerable poverty in the industrial world, where, in order to cut costs and increase competitiveness, corporations are slashing wages, especially in the US and the UK, replacing long-term with short-term contracts, men with women who are paid less, and full-time jobs by part-time jobs. For the same reason we are seeing the systematic dismantling of the welfare state. As a result, in the UK there is already an increasing number of people who have become too poor to feed their families properly, and this can only get worse. In the third world, the standard of living of the bulk of the people has been dramatically reduced, as have social services of all kinds by successive IMF structural adjustment programmes. And this is only the beginning, for among other things, with the last GATT agreement (the Uruguay Round), we are in effect applying a structural adjustment programme to the world as a whole.

In addition, a new industrial revolution is occurring today before our very eyes, one which can be even more socially destructive than the previous one. It is based on the complete restructuring or ‘re-engineering’ of corporations, to enable them to make full use of the new computer-based technologies. It is not confined to the industrial world, but is occurring everywhere. What is more, as the vast transnational corporations that can afford these technologies replace the small companies that previously catered for the domestic economy, fewer and fewer jobs will become available.

Most members of the IFG consider that the highly automated global economy we are creating will be able to function with possibly no more than 20% of the world’s potential work force. In the third world, the vast bulk of small farmers, artisans, street vendors and small businessmen cannot conceivably survive the changes they face today, any more than their equivalents in the industrial world have been able to survive those that have occurred there over the last 50 years. Their functions will be systematically taken over by TNCs.

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Marginalised majority

Unfortunately these people make up the bulk of the present population of most third world countries—possibly 650 million out of the 850 million inhabitants of India. In China the number is probably over a billion. Most of these people can only be marginalised, and will seek refuge in the mushrooming slums around the major conurbations where unemployment levels are already extremely high. Most in fact will be condemned to utter destitution. This alone must make the global economy we are in such pains to set up extremely short-lived. No one has yet ever tried to marginalise 80% of humanity, and it is unlikely that it will prove possible.

Corporations will soon have to contend with overlapping economic crisis, social crises and ecological crises, not to mention moral and spiritual ones. Many chief executive officers, I am told, are already terrified of what will happen to their corporations if they continue for long on their present path, navigating as they are in ever less chartered waters. But to extricate themselves is not that easy.

Needless to say, there is no cosmetic solution to the problems that they and the world in general will face. They can only be solved by changing the course on which our society is set. Instead of aiming to create a global economy dominated by vast transnational corporations catering for a world market, we need, on the contrary, to recreate a network of loosely connected local economies run by small and medium-sized companies that are rooted in a particular society to which they are accountable economically, socially, ecologically and morally, and catering largely, though not entirely, for local and regional markets.

Only in this way can we reduce sufficiently the impact of our destructive economic activities on our rapidly degrading environment. Only in this way too can we prevent the further disintegration of our social fabric, for only local economies can provide the economic infrastructure for the healthy and cohesive families and communities that are the key building blocks of a healthy society, and that in the industrial world of today exist in name only. Only in this way too can we hope to assure the livelihoods of those who are still outside the orbit of the world economy and provide jobs for those who require them—for only small and medium-sized companies can possibly provide employment for all those who would otherwise be marginalised and rendered largely destitute. Only a society made up of healthy families and communities based on local economies, what is more, could possibly be imbued with the religio-cultural worldview that can once more give meaning to our lives and rescue us from the sordid nihilism into which we are rapidly sinking.

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