Joseph Stigletz, Nobel Prize winning, former chief economist for the World Bank began to notice a pattern. Everywhere The Experiment was implemented, economic disaster occurred. Throughout the 80s and the 90s, all across Africa and South America, the free marketeers, through the mechanisms of the IMF and the World Bank, got to try out their theories: deregulate, denationalize, privatize.An overall slowdown in reducing infant and child mortality and in improving overall life expectancy (this is not necessarily an indicator of policy failure--it could be a natural flattening of progress curve).
You don't have to go to Argentina to see the wrath of the Free Market God.
Yet despite these facts, proponents of Globalization, like members of a cult, ignore evidence for ideology. Here in the U.S., the neoliberals are driving the "free market is God" ideology right off a cliff. With every indicator of failure, they respond "more".
Take the California energy crisis. This is one of the few areas where the Thatcherists got to try out their experiments in the US unfettered. By promising cheaper prices for consumers through deregulation and market selection, they lobbied and passed a partial repeal of the Public Utility Holding Company Act. Result? In one day, electricity prices rose 7000%. No, that's not a typo. In the end they had to call in the regulators again. But not before Enron and others milked Californians for over $7 Billion.
How did they do it? They profiteered on the fact that electricity, unlike widgets, is not something you can do without. It is a "natural monopoly". So they colluded and schemed and basically held California's electricity for ransom. Spikes in prices and blackouts soon followed.
So what was the response to the disastrous results of partially repealing PUHCA? With strong Democratic support, just last year, Congress repealed the whole thing in the Energy Bill.
While the free marketization of natural monopolies such as water and power has proven disastrous, the free marketization of medicine is immoral. Just like water, health care is not optional. And yet the priest of the free market expect the forces of consumer demand to apply to kidney transplants and tonsillectomies. But they really don't expect that. They're just out to make a buck. So they falsely claim that profit incentives have created the best health care system in the known world. Meanwhile, 45,000,000 (45 million) Americans have to crowd into emergency rooms to get treatment and if you need something severe like a new kidney, tough luck.
Democrats: going right along.
Like Californians, all Americans are being taken for a free market ride. At every turn the neoliberals are trying to perform their ideologically driven, factually challenged experiment here. And the Democrats are going right along. The party of FDR has shed off it's old skin as the party of the people for a new, Globalization friendly sheen.
But in doing so, they have also shed the post-New Deal, anti-corporate, highly regulatory policies that oversaw the greatest economic prosperity in the history of the world and led, for the first time, to the creation of the middle-class.
By bellying up to the free market alter, Democrats have largely lost their reason for existing. And it shows. For the past few decades, with the exception of civil rights and social issues, Democrats have been hard pressed to define a unifying principle. The Democratic agenda has consisted of issues: education, prescription drugs for seniors, choice or now gay marriage. But a fundamental principle around which to coalesce has been awash in inconsistencies and contradictions. The old principles of economic justice and progressive populism have given way to corporate appeasement and economic ambiguity. The principles of FDR's New Deal and Johnson's Great Society have been replaced by Clintonian Machiavellianism and the myth of Globalization as vehicle for the spread of democratic prosperity.
And while the liberal left and the religious right have been fighting over partial birth abortions, endowment for the arts, and gay marriage, the corporate center have been driving off with the furniture.
This has led to an exodus from the Democratic party of progressives who no longer feel they can support policies that continue to allow the accumulation of wealth and power into corporations while devouring the poor and working class. And the exodus will spread. As free market reforms failed in South America and elsewhere, they will fail here as well. And there is nothing in our history to indicate that we are protected from the fate of those other failed countries: civil unrest, riots, military intervention. If you believe that we are fundamentally different from those in Argentina and elsewhere, I suggest you look at the streets of Boston after a Celtics upset.
The inevitable outcome of extreme economic disparity is social instability. And as all of the evidence indicates, the inevitable outcome of Globalization is extreme economic disparity.
Globalization vs. Democracy
Of all the outcomes of Globalization, none is more dangerous than the subversion of democracy. Just as corporate influence is corrupting the democratic process here at home, it corrupts smaller, less institutionalized countries tenfold. But if bribery of officials and CIA covert operations are the old way of globalizing, then the new way is the World Trade Organization and General Agreement on Trade in Services (GATS). The WTO is a way to give the undemocratic imposition of the corporate agenda a bit of legitimacy. Kind of like Disney in Vegas. And GATS is the new law that makes it all happen.
The GATS Article VI.4 says that governments have a duty to hold "a balance between two potentially conflicting priorities: promoting trade expansion versus protecting the regulatory rights of governments." But who determines this balance between democratically enacted regulation and the promotion of trade expansion? The democratically elected legislature? The democratically elected president?
A mysterious entity called the GATS Disputes Panel decides where the balance is drawn. Who is the GATS Disputes Panel? If you can find a list of it's members anywhere I would sure like to have it. But using a criterion called the "necessity test", the GATS Disputes Panel has the authority to override U.S. legislation if it finds that legislation causes an unnecessary burden to the promotion of free trade.
Keep in mind, none of the trade agreements -- NAFTA, GATS, and GATT -- are debated or voted on democratically. They are negotiated in closed session and signed in closed session. So we now have an undemocratic body that has regulatory override authority over not just the United States government but over all participating countries.
Make no mistake what is happening. The Globalists are attempting to replace the nation/state with corporate hegemony. In many respects they have already succeeded. Our democracy has been subverted not by dictatorial government takeover, but by the stealth usurpation through a shadowy pay to play scheme. Instead of the traditional coup by military means, an army of corporate lobbyists has descended upon Washington with decidedly similar results.
The Gift of Dubai Ports World
You won't see it on TV, but the Dubai ports scandal is an excellent opportunity to illuminate the Globalists view of the world, where the line between state services and corporate is absent. Do not be fooled by the distinction of DP World as a state owned company. Dubai is itself a corporation. Any semblance to statehood as Americans know it does not apply in Dubai.
So what we are left with in the conflict between global, corporate hegemony and the institution of American democracy, is a strategic blunder. The Globalists have left exposed their queen. We can thank the characteristic arrogance of the Bush administration for this gift. What we choose to do with it is another matter.
Comments are closed on this story.