This talk was presented at the “Policing the Global Economy – why, how and for whom?” international conference, held in Geneva, 23-25 March 1998. The conference was organized by the Bellerive Foundation and Globe International, and co-sponsored by the W. Alton Jones Foundation.
Proceedings of the conference were edited by Sadruddin Aga Khan, and published by Cameron May.
It was subsequently revised and extended for publication in Caduceus magazine.
My thesis is that there are 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.
As far as an effective World Environment Organization is concerned, I tend to agree with previous speakers that such an organization is not really feasible. The reason is that to set it up is not in the interests of the large transnational corporations that control the global economy via the World Trade Organization (WTO) and similar organizations.
We have heard today of the lack of democracy of the WTO, but that is true of all the Bretton Woods institutions. 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 Mr 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 WTO, for the first Article in its Constitution states that all member governments must adapt their laws to those of that organization, a non-elected organization 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, that is at the moment being frenziedly promoted by the 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, (many of which could have been enacted to protect local communities, local economies, the standard of living of our citizens, their natural environment, and their health), if this leads to a reduction in the profits of any transnational corporation.
Already the Ethyl Corporation of America is suing the Canadian goverment for $250 million for having passed 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.
The setting up of an effective environmental agency has not even proved possible in any of the regional institutionally-managed free-trade zones we have set up in recent years: the European Union for instance. In The Ecologist we have documented in great detail the EU’s policies on education and transport. Neither are determined by the European Commission, let alone the European Parliament, but by the European Round Table, made up of the CEOs of the biggest transnational corporations operating in Europe. What is more, there is every reason to suppose that the same is true with regards the determination of policies in other key areas such as agriculture and environment.
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 invariable 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 two billion dollars. 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 percent of these chemicals; 95 percent of those that are still on the market have thus never been tested at all – a truly horrifying thought. What is more, when it does establish that a particular chemical is carcinogenic, the EPA is incapable of forcing the corporation that produces the offending chemical to take it off the market. All it can do is negotiate with it and from a position of weakness rather than strength.
Let me give you an idea of its weakness. According to the law, if studies undertaken by a corporation reveal that one of its products has serious health effects on people exposed to it, the EPA must be informed within a given period of time. Failure to do this results in fines that increase every day so long as the information is still withheld.
The EPA knowing that many such studies were being carefully kept under wraps by the corporations involved, and knowing that it did not have the power to enforce the law, offered the corporations a drastic reduction in the fines they should incur for withholding this critical information if they handed it in before a certain date. To the EPA’s amazement, as many as 11,000 sets of such dissimulated studies were dispatched to them in all haste so as to take full advantage of the anmesty.
Under such conditions it is perfectly clear that the EPA cannot possible offer an assurance that any chemical on the market is harmless. Nor is there any chance whatsoever of its being able to set any serious acceptable standards for exposure to any chemical on the market. What is more, this will remain the case till the EPA is made powerful enough to control the otherwise uncontrollable chemical and pharmaceutical giants who have at their disposal limitless financial power – and this will never happen.
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 NGO such as the World Wildlife Fund.
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 can see anything to stop the erosion of the last inch of topsoil from what remains of the world’s dwindling agricultural land so long as there is a market for its produce. Nor, in spite of Kyoto, is there anything to prevent the further growth of CO2 emissions to the atmosphere and the further destablization 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 illegal to clearcut 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 percent below the 1990 level by the year 2008-2012. 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 stabilize world climate we would have to cut down emissions of greenhouse gases (of which carbon dioxide is the most important) by 60 percent to 80 percent, 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 – 4.5 ºC hotter by the time the carbon dioxide content of the atmosphere doubled, which should be around the years 2020 to 2030.
Few people seem to realize what a truly terrifying thought this is. Man has never lived in a world that is 4.5 ºC hotter. In addition, what we are seeing today is not just global warming but global climatic destabilization 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 CO2 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. A mere 5.2 percent 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 positive 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 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 ºC hotter, but can we adapt to a world increasingly hotter than this, and whose climate is becoming ever more destabilized?
Let us not forget 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. Indeed, as a senior member of the US delegation at the last preparatory committee meeting for the Rio Earth Summit admitted to a colleague of mine, some 85 percent of America’s environmental legislation is so vulnerable. This is not surprising, of course, as I cannot think of a law that could reduce clear-felling, soil erosion, or the generation of greenhouse gases, that does not interfere with trade.
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.
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 for ever. In all probability economic collapse will do so. Walden Bello – the Philippino economist, who like five of the speakers at this meeting is a member of the International Forum on Globalization – believes that the breakdown of the South American economy some ten years ago, the collapse of the Mexican economy four years ago, and that of the Far East, which we are witnessing today, 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: – uncontrolled 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 would 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 globalization 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 competitivity, 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 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 International Forum on Globalization consider that the highly automated global economy we are creating will be able to function with possibly no more than 20 percent 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.
Unfortunately these people make up the bulk of the present population of most Third World countries – possibly 650 out of the 850 million inhabitants of India. In China the number is probably over a billion. Most of these people can only be marginalized, 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 ever yet even tried to marginalize 80 percent of humanity, and it is unlikely that it will prove possible.
My brother, James Goldsmith, fully understood this and undertook a personal campaign to try and stop the American Congress from ratifying the GATT treaty. Lori Wallach, who is in this room with us today, and Ralph Nader, with whom she works, succeeded in getting together a hundred or so congressmen and their staff members. My brother tried to explain some at least of the implications of the treaty they were about to sign, and I shall quote a passage from his talk:
“If you ratify this treaty, no body of people in human history will ever have created so much misery and destitution; and who will be the beneficiaries? I might add the sole beneficiaries? The answer is the super-rich, people like myself, and what good will it do me to have more money when I will be surrounded by hordes of poverty-stricken and half-starved people screaming for my blood? I feel like someone who has been dealt a winning hand at poker when sailing on the Titanic.”
It is quite astonishing that so few people in a position of power and influence have understood this. Of course, they fail to do so at their own cost, for by marginalizing 80 percent of humanity, the global economy will marginalize itself. It will play an increasingly smaller role in the lives of the bulk of the population of this planet, most of whom, in order to survive, will have to form vast informal networks to produce and distribute the necessities of life, and which will constantly come into conflict with the global economy over access to essential resources like land and water.
Of course, to begin with, the transnational corporations will become increasingly powerful. David Korten has told us today that the money involved in mergers between vast TNCs is increasing at something like 50 percent every year. At this rate only a few giant corporations will be left in each sector of the economy.
The corporations, what is more, are more and more vertically integrated. Some of them just about control every step in the production and distribution of the goods they sell – steps that often occur in a large number of different countries. As a result it appears that already 30 – 40 percent of world-trade is simply made up of what are little more than internal transactions between the different subsidiaries of these giant corporations.
In addition, as the latter further tighten their grip on world-trade, the figure, I am told, could soon rise to 70 – 80 percent – perhaps even more. We would then be entering a new era of central planning on a global scale – central planning by a few giant corporations who have found more to gain by working together than by needlessly competing with each other.
In many ways they will constitute a sort of new world government – one that is likely to be more tyrannical and less concerned with the welfare of its subjects than any previous form of government. The question is for how long will it be tolerated? Nationalist movements with massive popular support are likely to rise up throughout the world against this new form of tyranny, as occurred throughout the colonial era, as people were dispossessed of their land and deprived of their livelihoods.
Corporations will soon have to contend with overlapping economic crises, social crises, and ecological crises, not to mention moral and spiritual ones. Many CEOs, 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 possible provide employment for all those who would otherwise be marginalized 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 world-view that can once more give meaning to our lives and rescue us from the sordid nihilism into which we are rapidly sinking.
Bretton Woods: “Bretton Woods Conference held in 1944, under US leadership, where aid was institutionalized as the industrialized world’s principal tool of economic colonialism. At that conference, 44 nations agreed to set up the key international institutions. They were: the International Monetary Fund (IMF); the World Bank (IBRD); and the General Agreement on Tariffs and Trade (GATT). These highly interconnected agencies formed a single integrative structure for manipulating world trade, which until the early 1970s was basically dominated by the USA.” From “The Future Of Progress” (ISEC 1993).
GATT: General Agreement on Tariffs and Trade.
IMF: International Monetary Fund.
OECD: Organization for Economic Co-operation & Development.
TNCs: Trans-national Corporations.
NGO: Non-governmental organization.Back to top