Advances in computer technology--primarily in the
transfer and processing of data--are crucial to the current era of
globalization, extending management's geographic control and
drastically increasing the speed and volume of international financial
flows. Thus both real capital (factories and their related jobs) and,
on a far larger scale, financial capital (foreign direct investment
buying up domestic operations and speculative flows for short-term
returns) have made the world a smaller, but not a safer, place.
Well, safer for capital. The rules of the IMF and the
WTO reduce the role of government and thereby advance the interests of
corporations so that they have more opportunities to make still higher
profits. The market fundamentalists believe that profits are a sign of
efficiency and that efficiency means everyone's standard of living
will rise. Thus the invisible hand of the market leads private greed
to serve the public interest.
But Adam Smith warned that the invisible hand only
works if there are competitive markets in which no agent has either
economic or political power. The structure of the international
institutions and their rules have been set by powerful interests.
Thus, the very people whose power violates the basic condition of
competitive markets design a world economy to give them power over
governments, consumers, workers, and the environment, in the name of
"free" markets.
The "level playing field" is the turf of
flat earth economics. P3 arrangements (public-private-partnerships)
really mean privatise-prevent-punish: Privatise the profitable
activities of government; prevent governments from regulating
corporations; punish governments that stand in the way of profits.
The use of profits as the criterion of efficiency is
also a violation of the theory of competitive markets. In economics,
profits indicate that something is out of whack. In the short-run,
high profits imply a shift in supply or demand that competitive
markets react to, indeed must erode for long-term efficiency. If high
profits continue, it is a sign of market power and inefficiency.
But corporations are formed to maximize profits and,
in flat earth economics, to ignore the social and environmental costs
of that pursuit. That's why corporations must be controlled. We must
remember they are legal fictions with responsibilities, not citizens
with rights.
The fundamentalists of flat earth economics would have
us believe that our future well-being depends on globalization and its
efficiencies. They promote There Is No Alternative (TINA). But they
want structures which reduce the well-being of the majority: as
workers forced by the mobility of real capital to accept deteriorating
wages and working conditions, as consumers buying goods at higher
prices and lower quality, or as communities in ecosystems degraded by
the processes of both production and consumption.
We must accept TINA only if we accept the Flat Earth
Theory of Income and Development, i.e., FETID. But if we are prepared
to say their TINA stinks, that it represents neither reality nor our
aspirations, we can do better.
We have to work simultaneously at the local and global
levels. We need to educate ourselves and other voters--and our
politicians--that there are viable alternatives. We need to develop
those alternatives ourselves, not have them foisted on us by
"experts" or powerful interests. We need sustainable
economics which meets our needs and the ecology's need for a
sustainable humanity.
Our global institutions must place social and
environmental needs ahead of profits. Start with a Tobin tax, a small
charge on large purchases of foreign exchange. It would dramatically
reduce speculative financial flows, removing the major element
de-stabilizing currencies. With stable currencies, governments will be
less vulnerable to the demands for structural adjustment programmes,
which undermine their economies, increase poverty, and give
corporations the power to ignore and even dismantle labour, social,
and environmental protections.
A Tobin tax would also generate revenues that
governments could use to help the poor, repair the environment, and
improve education, health, and the other social programmes which
provide the foundation for a sustainable future.
he
supporters of the unregulated globalization and privatization favoured
by the International Monetary Fund (IMF), the World Bank, and the
World Trade Organization (WTO) are market fundamentalists, the most
dangerous form of fundamentalism threatening social structures, the
environment, and democracy. Although contradicted by both economic
theory and by the evidence, they worship the god of profits, a god
which demands human sacrifice.
