This action might not be possible to undo. Are you sure you want to continue?
By Luuk van Middelaar
Working paper Written for the Institute of Infonomics (Heerlen, the Netherlands) September 2, 2002. Edited by Richard Miniter
“After all, they need to fill their cars with something”
Introduction The last decade or so the feeling has grown in the Western world that we are living in a new society, changing faster than ever before, finally unified by global capital flows and by a ‘web’ of new and indeed spectacular communication technologies. This sentiment has found expression in the frequent use of the term ‘new’ by social scientists as well as by the general public. Thus ‘new media’, ‘new economy’, ‘new spirit of capitalism’, and even a ‘new world order’ (although this last concept could be ironically done away with after Sept. 11th. 2001). Commentators agree that the common denominator behind these developments is the phenomenon of the economisation of social and political spheres. Because of its world wide scope this phenomenon is called globalisation.1 The surge of money seems to be even stronger than during the days when Marx wrote his Capital, destroying communities, uprooting traditions, and erasing ancient ways of living. As often, the ‘new’ arouses resistance. Rising against the unknown forces supposedly at work, a new movement is taking shape that is striving against globalisation, a movement whose very localised actions – attached to metropolises such as Seattle, Gothenburg, Washington, Genoa - have succeeded in filling
The subject of ‘globalisation’ has inspired a large number of publications since the mid-nineties. To give an idea of this overwhelming production: a bibliography on ‘the globalisation of the economy’ issued by the German Bundestag in March 2000, although mainly focussing on publications in German after 1995, contained already more than one thousand titles. The recent update (covering the period until December 2001) adds another 500 books and articles. (See: www.bundestag.de/verwalt/bibliothek/akt_lit/bibliographien/). Useful as a first overview, uniting some forty key articles written in the nineties by authors such as Francis Fukuyama, Samuel Huntington, Stephen J. Korbin, and others, is the reader Globalization, and the Challenges of a New Century, Patrick O’Meara, Howard D. Mehlinger and Matthew Krain eds. (Indiana U.P. 2000).
movement unites a broad coalition of ecological, Third-Worldoriented, human rights, protectionist, nationalist, MarxistLeninist, anarchical and other opposition groups from different countries; because of its ‘rainbow character’, the movement likes to present itself as a ‘civil society’ for the era of globalisation. In one important way this self-proclamation is true: the anti-globalisation movement offers the only largely shared and publicly expressed discourse on the recent global developments of economisation and informatisation – issues that are elsewhere only discussed by the professional inner circles of universities and think tanks. It is thus not only interesting but rather important to investigate the functioning, the force and the eventual failure of this unique public discourse on global economisation. In this paper, I will first take a quick glance at the historical background and present functioning of the anti-globalisation movement, briefly sketching the ideological and sociological configuration of the strands and groups that it is composed of. I will also explain the vital role the Internet played in the connection of all the grassroots movements (“After the Wall, the Web”). I will then concentrate on the key question of how the anti-globalisation movement theorises about the changing relationship between economy and politics. What are its responses to the basic issue underlying any attempt to interpret recent developments in the fields of economics, politics, and society? Answers will be given in two parts: first, I will try to map out the basic scheme of the antiglobalisation discourse (“Democracy against Capitalism”); second, I will focus on two of their proposed solutions to perceived global injustice (“Tariffs and Taxes”). I will argue that, paradoxically, the
anti-globalisation discourse against economisation consists mainly of an analysis of the world in economic terms.2 The campaigners come forward with economic responses and proposals to change the political system, thus ignoring power and politics, with counter-productive, sometimes even devastating consequences.
I. After the Wall, the Web The fall of the Berlin Wall in 1989 was seen by many as the beginning of a new era. The end of totalitarian communism became synonymous with the final victory of democratic capitalism. This millenarian thesis was of course most famously developed by American political scientist Francis Fukuyama, the self-confident herald of the ‘End of History’. 3 Note though that in Fukuyama’s view this so-called End did not mean that History was completely over – as many commentators too hastily misinterpreted him. It meant that the ‘historical vanguard’, that is, the most developed Western countries, had reached the final destination of mankind: capitalist democracy. Everything that was,
This first struck me during the days after ‘Sept. 11th.’. It subsequently became my main working analysis. The rigid economicist mindset of the American Left and the French Gauche almost obliged them to interpret the attacks on the World Trade Centre as the revenge of the Poor against the Rich, with the positive side effect of turning the perpetrators into representatives of victims. Influential leftwing intellectuals as Saskia Sassen (author of many well-documented books on globalisation), Susan Sontag, Ignacio Ramonet and Slavoj Zizek considered that America more or less deserved this punishment for having spread poverty and injustice throughout the world. Italian communist and author of Empire Toni Negri even expressed his satisfaction about the attacks. This was the ‘boomerang of globalisation’. The fact that the terrorists’ attacks were probably commanded by one of the richest men in the Arab world, executed by European-educated middle class young men, not aiming at social justice but at destruction of a political enemy, was in their eyes irrelevant, just as were religious or cultural categories to explain this political deed. Economics explained it all. Raised in the Marxist school of ‘political’ thinking, these one-dimensional critics were, distressingly, unable to perceive the autonomy of political motifs. 3 Francis Fukuyama, ‘The end of history?’, The National Interest, April 1989. Three years later, the question mark had disappeared: Francis Fukuyama, The end of history and the Last Man (New York and London 1992).
according to Fukuyama, still likely to happen (including wars and regional conflicts) could be considered as part of the ‘alignment of the provinces’, that is, as part of the historical process by which underdeveloped countries in the periphery would climb slowly to the same level of welfare and freedom as the happy centre. All humankind is heading for the same goal. The most important aspect of Fukuyama’s message was thus not: History is Over, but: History only has One Direction. This historical perspective might explain the rapidly growing popularity, in the 1990’s, of the term ‘globalisation’. Indeed, globalisation can be understood as the movement by which History marches towards the announced End, the world wide reign of capitalist democracy. The crumbling of the Cold War frontier, led to the belief that all frontiers would disappear. The epoch of the iron Curtain gave way to the era of (open) Windows… After the Wall, the Web. Many disparate economic, financial, technological, cultural and social phenomena suddenly seemed to be part of one, exciting story, the story of globalisation. One should therefore not even exclude the possibility that the term’s popularity found its origin less in a change in ‘the real world’ (if the reader wants to forgive me this naïve expression), than in a change in the way people started to think about historical developments in this world, or be conscious of them. The whole idea of globalisation might even be some sort of collective hysteria. As Italian novelist Baricco, in a stimulating booklet on the subject, put it: “Comment expliquer cette envie collective – cet empressement à utiliser la catégorie de globalisation, quoi qu’il se passe en réalité sur la planète?” Or, stated in a more prosaic manner: Why were the dozens of litres of Coca Cola per person already consumed by the Brazilians twenty-
five years ago part of ‘internationalisation’, and is the less than a bottle a year emptied by the average Indian today proof of ‘globalisation’?4 In this paper I will leave aside the intriguing question if, and to what degree, globalisation is ‘really’ something new. Therefore, no fascinating facts and figures on such hotly debated topics as the relative inter-penetration of the late-19th century economies compared to those of the 20th -century, on the rising coke-consuming capacities of the Indian subcontinent, or on the world-wide dominance of Roman law in AD 200 as prefiguration of American legal power AD 2000. Instead, this paper will focus on how people have interpreted these perceived changes and reacted to them; not (or only indirectly) on the thing called ‘globalisation’, but on the discourse-movement called ‘antiglobalisation’. To consider ‘globalisation’ as a working idea with which people understood the post-1989-march toward mankind’s historical destination, has another advantage. Such a reading could in its turn explain why it was the term ‘globalisation’ that, during the 1990’s, came to function as a ‘hate-object’, why people started to define their political position as ‘anti-globalisation’. Because the term seems not very well-chosen, and confusing. Sceptical commentators of the young anti-globalisation movement were eager to point out the irony that, in fact, the activists were on the contrary very ‘globalised’; uniting people throughout the (Western) world thanks to the Internet, relying on the same global information networks which facilitate the spread of foreign capital that they are fighting against. This conceptual weakness has by now been recognised: following best-selling author Naomi Klein,
Alessandro Baricco, Next (Paris 2002, translated from the Italian) 24, 21.
some of the activists now simply refer to ‘the Movement’, others found different solutions to avoid facile criticism (e.g., some Flemish activists tried to stimulate the use in Dutch of the alternative term of ‘anders-globalisme’ for the old ‘antiglobalisme’). All these efforts were made in order to express the idea that the movement is not so much against globalisation itself (this would be awkward and retrograde provincialism) but against a ‘certain type’ of globalisation, usually defined as the ‘neo-liberal globalisation’, ‘la mondialisation marchande’, etc. This conceptual confusion could have been avoided, if it had been understood from the start that the ubiquity of the term ‘globalisation’ was the dynamic expression of the popular post-1989 belief in the final victory of capitalism. Therefore, what goes under the label of ‘antiglobalisation’ can better be understood as ‘anti-capitalism’ or ‘counter-capitalism’. Berlin 1989, then, is indeed the best starting-point to explain Seattle 1999. Only the final victory of capitalism created the possibility of a new counter-capitalism. As long as communism was a political force embodied in a totalitarian regime, any anticapitalist discourse was discredited beforehand. (Although this had only been the case since the 1970s, when the last European fellowtravellers had to admit that their egalitarian paradise was in fact a political, economic and environmental nightmare.) Thus the collapse of the Soviet Union did not preclude the possibility of anticapitalism. On the contrary, it liberated a space for anti-capitalist critique that had been swallowed by the dark shadows of the Gulag Archipelago.5 After some wound licking in the early 1990’s, anti-
The most shameless even integrated the lessons of the anti-totalitarian critique and started speaking of ‘un totalitarisme libéral’, ‘liberal totalitarianism’ (Danièle Mitterrand, quoted in Jean-François Revel,
capitalist discourse could thus re-enter the ideological stage. It had recycled its political innocence. But in the process it had also lost its political force. Virgin again, but impotent. This uneasy situation explains some of the characteristics of the anti-globalisation discourse which we will encounter – the main temptation for any innocence without power being, of course, empty moralisation. Cut loose from its past, bereft of a road map for the way forward, anticapitalism has difficulties in going beyond saying ‘no’ to the world as it is. To refute the End of History, the best thing it came up with was – one religious perspective for another – the quasi-radical slogan: ‘Another world is possible’… It has been claimed that its forerunners even brought down the Berlin Wall. That may not be true. But the Internet surely did play a substantial role in the growing of the anti-globalisation movement6 . Some thinkers even link the two phenomena, making the Web and the Movement the heart of something that appears always a revolution in human nature. Sociologist Manuel Castells, the guru of the information society, affirmed back in 1996: “our societies are increasingly structured around a bipolar opposition between the Net and the Self”. This newly found Self is, according to Castells, the stage of a new form of the political action: “New information technologies are integrating the world in global networks of instrumentality. Computer- mediated communication begets a vast array of virtual communities. Yet the distinctive social and political trend of the 1990s is the construction of social action
La grande parade. Essai sur la survivance de l’utopie socialiste, Paris 2000, 353) or of “fascisme libéral” (sub-commander Marcos in Le Monde Diplomatique, March 2000). 6 I will continue to use this term.
and politics around primary identities, either ascribed, rooted in history and geography, or newly built in an anxious search for meaning and spirituality. The first historical steps of informational societies seem to characterize them by the pre-eminence of identity as their organizing principle.”7 Castells thus sees the new forms of social and political organisation as the direct product of the ‘information age’… One does not have to agree with Castells’ claims. Yet, one of the sociologist’s favourite examples of such a ‘new social movement’ did develop into an icon of the anti-globalisation movement, namely the Mexican Zapatistas’ Army led by the subcomandante Marcos.8 Blessed with a feeling for publicity, the mysterious sub-commander launched a new attack of his Zapatistas rebellion in southern Mexico on the day of the coming into force of Northern American Free Trade Area (NAFTA), January 1, 1994 – thus placing his rather ordinary guerrilla under the sign of the global struggle against neo-liberalism, securing world-wide sympathy. The Internet played a huge role in this successful campaign. A website dedicated to a study of Marcos’ movement states: “The international circulation through the Net of the struggles of the Zapatistas in Chiapas (Mexico) has become one of the most successful examples of the use of computer communications by grassroots social movements. That circulation has not only brought support to the Zapatistas from throughout Mexico and the rest of the World, but it has sparked a world wide discussion of the meaning and implications of the Zapatista
Manuel Castells, The Rise of the Network Society (The Information Age: Economy, Society and Culture, I) (Cambridge, MA; Oxford, UK 1996) 3, 22. 8 Manuel Castells, The Power of Identity (The Information Age: Economy, Society and Culture, II) (Cambridge, MA; Oxford, UK 1997) 79-81.
rebellion for many other confrontations with contemporary capitalist economic and political policies.”9 The Zapatista movement did exist before the Internet. But it was the Internet that linked this particular movement to all the other movements that subsequently came to make up the antiglobalisation movement. Without the Internet, the global movement could not have existed. How else would all these different organisations and ‘grassroots’ movements have found each other? People coming from the anti-apartheid movement, the campaigns against US intervention in central America, pacifists, environmentalists, European former communist parties, new protest movements in the Third World, they are all united under the anti-globalisation label. Journalists in Seattle 1999 marvelled at the smart use of information technology by the campaigners.1 0 Indeed, the Internet and e-mail, the cheapest and fastest media for an exchange of information, enabled the predominantly small, non-profit groups with tiny budgets to orchestrate massive protests. The conviction that they all belong to a world wide protest movement, undoubtedly contributed in return to the selfconfidence of the local groups that make up this movement – the whole strengthened the parts. The line which connects Birmingham to Seattle to Washington to Porto Alegre and beyond has been the Internet. The Web: unparalleled fertiliser for grassroots…
http://www.eco.utexas.edu/Homepages/faculty/Cleaver/zapsincyber.html. Lately, the cyber attention to the Zapatistas has somewhat diminished (due, perhaps, to the rather unromantic negotiation talks Marcos had with Mexican president Fox?). 10 Even before Seattle, a FT-reporter wrote about the mid-1998 protests against a OECD proposal: “The opponents’ decisive weapon is the Internet. Operating from around the world via web sites, they have condemned the proposed agreement as a secret conspiracy to ensure global domination by multinational companies, and mobilized an international movement of grassroots resistance.” Financial Times, 30 April 1998, quoted in: Naomi Klein, No Logo (New York 1999) 443.
To get an idea of the movement’s world wide functioning, it might be useful to finish these preliminary remarks with a presentation of a few of the more important organisations of the anti globalisation movement and their websites. - International Forum on Globalization (www.ifg.org): a think tank, founded in San Francisco, January 1994; a very early grouping of individuals and organisations who wanted to fight the forces of ‘economic globalisation’ following the signing of the NAFTA (North American Free Trade Area) Treaty. The IFG now represents more than sixty organisations from twenty-five countries. - Indymedia (www.indymedia.org): a media centre born in “Seattle 1999” uniting “independent media organizations and hundreds of journalists offering grassroots, non-corporate coverage”. Considering that the classical media are part of ‘the System’ and cannot guarantee independent news, reporters of Indymedia cover, via Internet and thanks to small digital camera’s, the mass demonstrations that have given the virtual movement its substance. Radio coverage is taken care of at Indymedia’s wssd.waag.org. - Protest.net (www.protest.net): can be considered as the diary of the movement. This website announces major protests all over the world, with one-issue-subgroups like http://pax.protest.net/ for anti-war and anti-racism events, etc.
- The Ruckus Society (http://ruckus.org/): is a facilitating organisation. Under the motto “actions speak louder than words” the Ruckus Society organises nothing less than training camps for activists – apparently, military precision is needed to get enough media attention for your anti-globalisation action… - ATTAC (www.attac.org). This is a central player in the antiglobalisation movement. Originally a French organisation, founded in 1999 by two editors of the leftwing magazine Le Monde diplomatique, Ignacio Ramonet and Bernard Cassen, in order to plea for the regulation of international capital flows via the introduction of the so-called Tobin Tax. Having now broadened its scope beyond fiscal matters, and with local satellites all over the world, Attac is probably the best known and most powerful antiglobalisation organisation. In the old paper-world, the journal of its founders finds an important readership all over the world (www.monde-diplomatique.fr). - No Logo (www.nologo.org): together with the Attac-movement, the book No Logo (1999) by Canadian journalist Naomi Klein has probably done most to give ‘the Movement’ a place in public discourse. The site dedicated to her international best-seller is half fan-club half classic activists’ website. - Another leading personality of the anti-globalisation movement is French goat farmer and activist José Bové. Leader of the farmer union Confédération paysanne (http://www.anda.asso.fr/acteurs/fichesonag/confedpaysanne.ht
m), he had to face a three-month prison for vandalising a McDonald’s restaurant in Millau, southern France (1999). - World Social Forum (http://www.forumsocialmundial.org.br/): massive annual gathering of adherents to the anti-globalisation movement in the Brazilian city of Porto Alegre (a tradition that began in January 2001), the World Social Forum wants to be the counterpart of the World Economic Forum held every year in Davos and attended by the most powerful politicians and businessmen of the world. - There is a countless multitude of one-issue organisations/websites. Some fight a particular international institution, like www.stopthebank.org or www.dropthedebt.org. Others are ‘watchdog’ of corporate business in general: for instance the Observatoire de la mondialisation (http://terresacree.org/obsmondi.htm) headed by Susan George, grand mother of the movement, Corporate Watch (www.corpwatch.org) or the Amsterdam-based Corporate Europe Observatory (www.xs4all.nl/~ceo/). Others again focus on the Third World (e.g., Third World Network, www.twnside.org.sg/), or on the environment (e.g., Rain Forest Action Network, www.ran.org). - A whole group of organisations tries to hit the enemy in its heart, by rolling back the commercial, consumerist and corporate overtones of our own culture: best-known are Adbusters (www.adbusters.org), Buy-nothing-day
(www.buynothingday.co.uk) and Reclaim the Street (many local sites). - Interesting are, finally, the websites that exist uniquely to prepare one event (e.g., www.september30.org, www.a20.org – these abbreviations refer to dates or dates-and-places of mass demonstrations). If one argues that Internet functions as a sort of new public space, one could say that this ‘virtual’ public space has materialised in the streets during protest acts all around the globe. These single-event-websites show how the Web makes it possible to swap from the world-wide global to the small-street local. - Although this world wide myriad of anti-organisations and websites almost represents, as I said earlier, the unique public discourse on globalisation, it must be noticed that people in favour of globalisation are starting to feel the need to speak themselves out as well: a group of Scandinavian neo-liberals have started the website www.motattack.nu (‘motattack’ means ‘Counter-Attack’ – a name testifying of the central position of the original ‘Attac’). As if globalisation is no longer seen by its defenders as a natural thing that will conquer the world anyway, but as a phenomenon that needs support from the world of words as well. II. “The World is Not For Sale” : Democracy versus Capitalism On an organisational level, the anti-globalisation movement is held together – and has even been forged – by the Internet. On an
ideological level, it is united by a common analysis of evil: “unbridled” global capitalism. The purpose of this paper is to analyse the dominant views of the anti-globalisation movement on the relationship between the economy and politics, and its resulting political strategies. It is not an easy task. Prolific as the anti-globalisation writers are, these views are hardly ever articulated in a rigorous way. Moral indignation often takes the place of cool analysis. The most obvious contradictions pass unnoticed. Not only in the sense that the movement is made up of interest groups with conflicting demands. Protection of small French farmers does not necessarily go together with stimulating Third World agricultural exports. Nor is it easy to reconcile American anarchists fighting against government, with those former Italian communists who ask for more state regulation in the field of international finance. Such fundamental differences – more tariffs or less tariffs?, more state or less state? – could easily create unbridgeable conflicts and chasms in a movement. To avoid these, the best thing it can do is to satisfy itself with the rhythmic mass celebration of being good and sharing an enemy. In that sense, the prefix ‘anti-’ expresses a necessary condition for the success and survival of the globalisation movement. But contradictions not only exist among different interest groups. They also appear on a more fundamental level, within the basic beliefs of the average anti-globalisation campaigner. To cite only one example: while there’s the fear that the Western world is falling prey to capital, that no value will resist the blaze of the financial argument, that civilisation – family, art, charity – will be
“sold out,”1 1 there is also strong indignation about the Third World’s poverty and inequality, resulting in pleas for debt reduction, and massive capital redistribution. Regardless of the question whether these sentiments are justified, one is at least entitled to expect some reflection on how it is possible that in one case money appears to be the problem, and in the other the solution.1 2 As things are now, one wonders sometimes what the anti-globalisation activists consider worse: the fact that ‘we’ are rich or the fact that ‘they’ are poor. (The poor would know how to answer to that one.) In the present section (“The world is not for sale”), I will try, notwithstanding these contradictions, to categorise some of the political visions of the anti-globalisation movements. In the next section (“Another world is possible”), I will look closer into two policy proposals for the improvement of the distressing situation that gives rise to most feelings of guilt, namely the poverty of the Third World. Naomi Klein’s best-seller No Logo, the publication of which coincided more or less with the Seattle events of 1999, is a useful entrée en matière.1 3 In this fine piece of journalism about the rise to power of corporate multinationals and of brand, Klein (b. 1970) traces the beginnings of the ‘anti-corporate’ movement. She recalls how the shift in attention on North American university campuses from the postmodernist questions of identity (gender, multiculturalism, etc.) to socio-economic issues that were still
Reference to the influential Dutch pamphlet, ‘De uitverkoop van de beschaving’, NRC Handelsblad, May 1st 2001, that gained support throughout the political spectrum. 12 The implicit answer would probably be that (private) capital is in both cases the agent of evil: ‘their’ poverty find originates in ‘our’ wealth’. But, as Paul Krugman once dryly said: “After all, global poverty is not something recently invented for the benefit of multinational corporations”…
regarded as old-fashioned in 1995, came about because of one particular evolution: the invasion of public space with billboards. Big multinationals entered the corridors of the state universities, trying to sell Nike or Pepsi. “Big deal” the students could have continued to say, but it was suddenly felt as the final erosion of public space, as the one drop too many against which action needed to be taken. The ubiquity of logos, brands and advertising, leaving no single spot untouched – No Logo is almost pervaded with the sentiment of suffocation – is interpreted by Klein, unsurprisingly, as the sign of a new capitalism. A capitalism that has, in a process of deregulation and privatisation since the 1970s, in some cases out-sourced production itself (to low-wage-countries), leaving branding and marketing as the core-business. Just a new step in the ever ongoing process of division of labour, one could say. But for Klein and her readers this movement betrays in the first place a world of growing injustice: a company like Nike spending hundreds of millions on billboards on highways or in university toilets, while the shoes it sells are produced by, say, children in sweatshops on the Philippines for 60 euro cents an hour. Or Shell extracting huge profits from Nigerian oil fields, while humanrights activist Ken Saro Wiwa who fought for the rights of his Ogoni people in the same region was executed by the Nigerian regime. Klein’s book describes the rising public awareness for such stories in the 1990s, the new ethical consumer activism resulting in boycotts of some (but not all) corporate multinationals. Campaigning groups that a few years later were to form the antiglobalisation movement, discovered they possessed a power of
Naomi Klein, No Logo (New York 1999).
their own: as consumers, they had the economic power to say no, and they were listened to. From the campaigner’s perspective – lobby groups in North America with high moral standards – this boycott movement was successful. (As to the Third World’s perspective, see next section.) Multinationals had to respond. In the second half of the 1990’s, American student movements concerned about Burma succeeded in “shaming nearly every brand-name company out of the country, from Pepsi to Texaco”, a catholic archbishop enforced a “no sweatshop zone” in his New Jersey archdiocese contacting all schools, the Berkeley City Council passed many boycotts, etc. With the invention of this new ‘brand-based politics’, big business seemed on its knees before ethical demands. But Naomi Klein – it is one of the charms of her book – is aware of some of the limits of this brand-based approach. Most fundamentally, only products with public visibility can be the subject of consumer activism. Companies without retail outlets – like the gas company ‘Unocal’, accounting for half of the foreign investment in Burma – go ‘unpunished’. Further, if one logo gets all the attention, others are left off the hook. Thus, when Shell was partly kicked out the Nigerian petrol market, other companies took over. The brother of the late Saro-Wiwa (favourably quoted by Klein) didn’t see this as a major problem: “It is important not to make people feel powerless. After all, they need to fill their cars with something. If we tell them all companies are guilty, they will feel they can do nothing. What we are trying to really do, (…) is to let people have the feeling that they can at least have the moral force to make one company change.”1 4 This is, however
understandable, quite a revealing quote: showing the characteristic combination of powerlessness and moral rightness, against the background of an – unavoidable – ongoing participation in the market economy. The real weakness of this ‘shoppers-against-capitalism’ type of protest, is that it is easily encapsulated by the ever inventive capitalism it wants to beat.1 5 Thus while Nike was the campaigners’ favourite scapegoat, its competitor Reebok – just as involved in sweat-shop production – got away with a self-righteous “Reebok Human Right’s Award”, part of a brand new marketing strategy. Furthermore, the movement depended heavily on products that people actually want to buy. The author of No Logo: “If we truly need the glittering presence of celebrity logos to build a sense of humanity and collective responsibility for the planet, then maybe brand-based activism is the ultimate achievement of branding.”1 6 When Klein wrote these lines, she could not foresee that her book would turn itself into a text book example of such a mechanism. No Logo – few commentators could resist to make the observation – is a very strong brand. For proof, all translations have stuck to the English title (and not Geen Logo, Sans Logo, etc.): the name is stronger than the product. The makers of the No-Logo website are well aware of this paradox. They produce hilarious explanations on how they are, as it were, at the same time inside and outside the system. The visitor can read: “Yes, if you want to, you can buy this book. This site is not about selling the book. Nevertheless, we’d not
For an interesting analysis of how the managerial ‘new capitalism’ successfully absorbed the penultimate wave of anti-capitalist critique from the sixties, see Luc Boltanski and Eve Chiapello, Le nouvel esprit du capitalisme (Paris 1999). 16 Ibid., 428.
be doing our jobs if we didn't at least give you a few links to find out how to obtain the actual artefact.”1 7 Click and buy! The same contradiction haunts the anti-corporate strategies of adbusting and culture jamming: the practice of parodying advertisements and hijacking billboards, that gives the antiglobalisation movement some Situationist flavour. “[S]emiotic Robin Hoodism”, says Klein. Father of the movement is Kalle Lasn (b. 1940), communist and populiser of the slogan “the world is not for sale”. Typically, Lasn’s anti-marketing magazine Adbusters has been so well-marketed (don’t miss www.adbusters.org), that the radicals for whom it was meant lost their interest because it had ‘lost its subversive power’. And what to think of ‘Buy nothing day’? A regular event – the next big one is scheduled for Saturday, November 30 (see www.buynothingday.co.uk) – where we can participate by not participating. These protests are naïve and sterile. They first define the enemy in exclusively economic terms (be it global capitalism, consumerism, or commercialism) and then try to fight it with an economic instrument that is, moreover, merely negative: economic abstinence as the nec plus ultra of radicalism. Just as the first British workers who were despaired by the Industrial Revolution decided to attack the machines that uprooted their lives had to wait four decades before Marx could give them a coherent ideology, in the same way the contemporary non-buying, graffiti-spraying part-time-consumers mistake a consequence for a cause, thus seriously missing the point. These neo-Luddites would need a Marx… There is no way out of the world of money, not even for the people who think they’re fighting against it. This was illustrated in
a rather unexpected manner by FT-journalist James Harding, one of the few to have researched the financial situation of the antiglobalisation movement. He explains how it has been affected by the recently declining economic situation. Not only might public funding become less generous, writes Harding in October 2001, “[m]ore importantly for the protest movement, the boards of charitable foundations which have been some of the big givers to critics of international financial institutions, for example, are now wary of being aligned with the critics of capitalism. The result is that you will find anti-globalisation activists in San Francisco sounding rather like depressed dotcommers. They talk about the need to be ‘entrepreneurial’. Rather than depending on charitable giving, they look to running fair trade shops or ‘reality tours’ for holidaymakers with a global conscience. They do not have the managerial talent, they say, to match the group’s ambitions with its resources. Charitable foundations will often fund projects, but not infrastructure or back office operations. They fret about the strings attached to donations, particularly when they come from suspect corporations. The movement, critical though it was of burgeoning global companies, was buoyed by the wealth which filtered through from an expanding international economy. In fact, a large number of businesspeople have - wittingly or unwittingly - become big donors to counter-capitalism.”1 8 Although an enthusiastic British newspaper claimed that No Logo was “the Das Kapital of the growing anti-corporate movement”, this is too much honour. (Unless one follows Marx’ own famous phrase about history repeating itself, the first time as tragedy, the second time as comedy.) Towards the end of her book,
James Harding, o.c.
Klein understands the limits and paradoxes of consumer activism. As long as one searches an economic way out of the economy, one will keep turning around in circles. The Canadian writer admits the perverse consequences of the massive adoption of codes of conducts by corporate multinationals, following the protests: “There is something Orwellian about the idea of turning the enforcement of basic human rights into a multinational industry, as the private codes would do, to be checked like any other quality control. Global labour and environmental standards should be regulated by law and governments – not by a consortium of transnational corporations and their accountants, all following the advice of their PR firm.”1 9 Just before closing time, the cultural and economic perspective that has been dominant throughout the book, is exchanged for a political one. But Klein does not give much content to this. She speaks somewhat vaguely of a “truly globally minded society”, and wants to give politics one last try: “Political solutions – accountable to people and enforceable by their elected representatives – deserve another shot before we throw in the towel and settle for corporate codes, independent monitors and the privatisation of our collective rights as citizens.”2 0 Or is the political towel thrown down? That, at least, is the disillusioned idea of the anti-globalisation writer presented as the ‘European answer to Naomi Klein’, Noreena Hertz. In The Silent Take-over (2001), this young British economist tries to defend the thesis best summarised by the subtitle of her book: Global Capitalism and the Death of Democracy. Combining recent trends
Klein, o.c., 437.
in political studies with wide-ranging anti-globalisation arguments, Hertz argues forcefully that the classic politics of the nation-state is dead. She claims that since the doomed neo-liberal days of Reagan and Thatcher a complete change of paradigm has taken place: “Economics is the new politics, and business is in the driving seat.” On the one hand, big business behaves itself as if it were sovereign. On the other hand, national administrations stopped listening to their citizens (as they used to do?) and now exclusively serve the interests of corporations (had they never done before?). These rather brutal affirmations are supported by statistics showing multinationals having a bigger turnover than the GDP of mediumsized countries, or a Disney CEO earning as much as the total revenues of some Pacific island. These figures are thoughtprovoking indeed, but unfortunately Hertz herself does not do much thinking beyond them. She has her big phrase ready: “As we enter the new millennium, arguably the entire world is of international corporations, by international corporations, for international corporations.”21 As a proposition about the state of things in the world, such a phrase is meaningless. Who can give us the guarantee that the world could not be of, for and by ‘the people’, ‘the rich’, ‘the freemasonry’, ‘God’, or ‘human genes’…? Or take this statement: “In the 21st century economic power has replaced military might.”2 2 Anyone can see this is simply not true. Of course it helps to be rich, if you want to be militarily powerful. That is how the United States won the Cold War. But nowadays the US do not see Iraq as a challenge to their economic
Ibid., 442. Noreena Hertz, The Silent Take-over. Global Capitalism and the Death of Democracy (London 2001) 105.
power (its GDP is only a fraction of the American one), but as a threat because of its possible military might. The standard suspicious counter-argument that it is ‘all about petrol’, will not hold. During the War in Afghanistan, the US were desperately seeking an alliance with neighbouring Pakistan, because it was in possession of nuclear weapons – not because of its rather modest petrol stock. Claiming that economics has replaced military power, is a flagrant categorical error. It comes down to claiming that a bunch of dollar notes or an international currency transaction could have destroyed the World Trade Centre. Power politics exist, and it will continue to do so. Even honest national politics will continue to exist. Provocative as always, Hertz affirmed in an October 2001 interview that people nowadays are more interested in the television elections like those of Big Brother, than in the elections for the national parliaments.2 3 Another sign that democratic politics is fading away. But again, Hertz was clearly wrong. During the spring of 2002, two EU member-states experienced extremely memorable elections: a fascist in the second tour of a presidential campaign in one country, a rightwing leader shot in the other. Both election campaigns, moreover, were not about economic issues (both outgoing governments having done a respectable job in this respect), but about internal security, the definition of the national political community, and other utterly political subjects. Someone who is completely blind to this political side of reality, cannot pretend to “make sense of this world and understand where it is likely to take us”.2 4
Ibid., 104. Noreena Hertz, Knack Magazine (Belgium October 2002. ), 24 Hertz, Silent Take-over, 9.
Hertz is a former neo-liberal Ph.D.-student who assisted her Harvard professor of economics in setting up the first postcommunist stock market in Saint Petersburg, shortly after 1991. Since then, she has not turned into a radical anti-capitalist, stating whole-heartedly in her book: “capitalism is clearly the best system for generating wealth”. Hertz’ change of camps, from radical bourgeois to bourgeois radical, did obviously leave her economic outlook untouched. That is why, in spite of the more politically coloured surface of her analysis, she does not help us much further than Naomi Klein. Consumer activism also is the bottom-line of Hertz’ political action: “Protest by the consumer public is fast becoming the only way of effecting policy and controlling the excesses of corporate activity.” Until the final conclusion, Hertz is unable to escape from this consumer perspective: “As citizens we must make it clear to government that unless politics focuses on people as well as business, unless government’s love affair with big corporations ends, unless politicians offer us a world worth buying, we will continue to scorn representative democracy, and will choose to shop and protest rather than vote.”2 5 While her antiglobalisation colleagues sing in a moral protest “the world is not for sale”, Ms. Hertz is waiting for the state to make the world worth buying. No Logo (1999) and The Silent Take-over (2001) are the two books that have probably best expressed the widely shared intuitive notion that, under pressure of the world markets, the space for an autonomous political world has been considerably reduced over the last 25 years. In the functioning of the anti-globalisation
Ibid., 3, 212.
discourse, two distinct ideas are closely intertwined. On the one hand, the feeling that public space is being privatised, increasing ly becoming inaccessible. On the other hand, the feeling that the nation-state is being sold out, thereby becoming powerless. Given this situation, its reasoning goes, we need new political forms capable of counter-balancing the global capitalist forces, which is to say, capable of raising taxes and redistribute money at worldlevel. Interestingly, Attac sees as its first purpose – in a statement perfectly summing up this intertwining of ideas – to “récuperer les espaces perdus par la démocratie au profit de la sphère financière”.2 6 The slogan “The world is not for sale” is thus more than a loose affirmation: it is a battle cry. It is the exhortation to reconquer space for “democracy” on “capitalism” (or, as Naomi would say, for “self-determination” on “brand”, or even, as still others say, for the “culture of life” on the “culture of death”27 ). Capitalism and democracy are in this discourse mutually exclusive concepts (one can see how anti-globalisation effectively uncouples what Fukuyama had proudly forged together). They function exactly as the pair ‘private (space)’ and ‘public (space)’: one goes by definition at the expense of the other. The superposition of these two pairs explains why the triumph of global capitalism (and/or the death of democracy) is most naturally comprehended as a spatial phenomenon. How “Reclaim the Streets” – initially dismissed as a movement of youngsters occupying the roads for a party – became in the eyes of anti-globalisation cadres a major struggle, a quintessential democratic movement. The conceptual
http://attac.org/fra/asso/doc/plateformefr.htm Katharine Ainger, ‘A culture of life, a culture of death’, The New International, nr. 340, Nov. 2001 (www.newint.org/issue340/culture.htm)
ambiguity (brilliantly exploited by the movement) is that the equation ‘public space’ – ‘democracy’ does not hold, nor, for that matter, ‘private space’ – ‘capitalism’. Because the ‘unbridled’ enemy is going global, the resistance that has to enter the same global field. It is in this precise sense that most members of the anti-globalisation movement are pro a certain type of globalisation. This reform-minded majority of the movement has high hopes concerning new global institutions. They discern the beginnings of a global democracy, a situation in which international organisations levy taxes and regulate finance, where poverty is eradicated, where health care and maybe education are provided. In short, they dream of a sort of world wide welfare state. For these reformers, part of the existing international structure has to disappear: the World Bank, the IMF and the WTO will be replaced by alternative, ‘more social’ organisations. The NGO’s making up the anti-globalisation movement would surely be quite willing to take over; e.g. why not have the above-mentioned World Social Forum in Porto Alegre on a permanent basis? The NGO’s consider themselves the dawn of a new global civil society. I will not enter a discussion of this interesting concept here.28 Most literature on the subject is rather self-congratulatory. Being convinced that it is morally right, the anti-globalisation movement is hardly ever plagued by doubts about its right to represent the people it speaks for. As an observer mildly put it: “It has an inflated sense of its own importance.”2 9 Somewhat more aggressive is the gibe of one of the rare pro-globalisation players on the Web: “Typically, the opponents of globalisation claim to be representing
The London School of Economics has started a yearbook of high quality devoted to Global Civil Society, first issue 2001. Available at www.lse.ac.uk/Depts/global/Yearbook 29 Harding, o.c.
a broad public opinion and to speak in the name of the poor. The people rebelling against the Establishment – this is how the anarchists in Black Bloc or the activists in Attac want to be seen. This is how the so-called Battle of Seattle was orchestrated. This is how they legitimate the political hooliganism symbolised by a José Bové. In this lying playacting, the representatives of almost every government are portrayed as usurpers, whereas a multitude of micro-sects describe themselves as the true representatives of the world population. Never has the deception been as complete!”3 0 The reformers in the anti-globalisation movement striving for ‘global governance’, led by Klein and Hertz, do not represent the only school of thought. The movement still contains some authentic revolutionaries – a minority maybe, but some of them highly respected by the softer majority. The two authors that contributed most to giving this revolutionary strand its intellectual credits, are Tony Negri and Michael Hardt. Together they wrote Empire (2000), a sophisticated philosophical variation on the themes of which Klein, Hertz and others give a light version, for which they have been hailed in the French press as “the two Marx and Engels of the Internet age”. They do make an interesting couple. Toni Negri (b. 1940), Italian philosopher and political scientist, formerly the ideologue of the Italian Marxist-Leninist red brigades in the seventies, is currently imprisoned in Rome for complicity with terrorist activities. Michael Hardt (b. 1969) is American associate professor in literature at Duke university. Together they represent the fusion of European communism and North American multiculturalism characteristic of the antiglobalisation movement.
Empire is an ambitious book: it aims to give all-embracing answers to the questions of political economy we are dealing with. The thesis of the authors is rather simple: globalisation is ‘Empire’. The end of the sovereign nation state which is the general point de départ does not lead them to hasty conclusions about the end of politics, with big business “in the driving seat” (Hertz). No, Negri and Hardt do keep a political perspective by claiming that a new sovereign politico-economic power is in place: Empire. The problems start when they try to define this Empire. It is impossible to find out whether the authors think of this successor to the nation-state as people, capital flows, big business, or an invisible dark force. The whole conception is built on the religious paranoia that says: ‘There must be something.’ What? Empire. Negri and Hardt’s paranoia has its philosophical foundations in the work on disciplinary power by Michel Foucault. This is an invisible power that pervades us and keeps us, as it were, imprisoned without us knowing it. This conceptual device of the “voluntary slavery” (or “servitude volontaire”, a term coined by the French 16 th -centurly writer De la Boétie) is extremely popular in anti-globalisation discourse. One can easily understand why: that people can be oppressed and not know it, enables this moral vanguard to find victims who are still unaware of their state. No need to go the Third World: our being happy in our consumer paradise is the final proof of our oppression by capitalist Empire. But the concept has its inconveniences. It is, for instance, impossible to know where to look for it. As Negri and Hardt put the difficulty themselves: “The identification of the enemy (…) is no small task given that exploitation tends no longer to have a specific
place and that we are immersed in a system of power so deep and complex that we can no longer determine specific difference or measure. We suffer exploitation, alienation, and command as enemies, but we do not know where to locate the production of oppression.” But the authors do not despair and continue: “And yet we still resist and struggle.”3 1 The form which this resistance will take, is not clearly described. But one may surmise that the sympathetic antiglobalisation grassroots will not blow away this imperial monster. The victory of Empire is s complete that the “Counter-Empire” o needs to arm itself. Violence will be needed. And the book Empire is not only a theoretical proposition, it is a pamphlet, a call for Revolution. Unfortunately, these self-declared communists3 2 do not give any insight into the world that will be born out of the implosion (or explosion, one does not know) of Empire. As talented dialecticians, they can of course find a reason; halfway through the book the reader finds this announcement: “Even when we manage to touch on the productive, ontological dimension of the problematic and the resistances that arise there, however, we will still not be in a position – not even at the end of this book – to point to any already existing and concrete elaboration of a political alternative to Empire. And no such effective blueprint will ever arise from a theoretical articulation such as ours. It will arise only in practice.”3 3 Modest, one could say. But also utterly irresponsible, in view of the humanitarian, political, economic and environmental “practices” that followed the one or two successful
Michael Hardt and Toni Negri, Empire (Harvard U.P. 2001 ) 211. See their closing remarks: “This is a revolution that no power will control – because biopower and communism, cooperation and revolution remain together, in love, simplicity, and also innocence. This is the irrepressible lightness and joy of being a communist.” (Hardt and Negri, o.c.., 413) 33 Hardt and Negri, Empire, 206.
communist revolutions in world history, and to which such names as ‘Gulag Archipelago’ and ‘Cultural Revolution’ are attached. By now it will be clear on what type of standard scheme antiglobalisation, whether of a reforming or revolutionary nature, is built up. I have mostly focussed on its expression in three influential books: No Logo (1999), Empire (2000) and The Silent Take-over (2001). But the same line of thinking is to be found on the multitude of websites produced by the grassroots movement. It is a scheme of moving simplicity. On the one hand, a planet completely dominated by the evil powers of money: brand, global capitalism, la sphère financière, Empire. On the other hand, one finds “a truly globally minded society” where “selfdetermination”3 4 is the rule (Klein), where solidarité is the dominant sentiment (Attac), Counter-Empire (Negri & Hardt) and other forces of the good that cannot be described in detail. Noreena Hertz, after having said she is neither anti-capitalist nor pro-state, claims her own book to be “unashamedly [sic] pro-people, prodemocracy, and pro-justice”.3 5 These are of course empty phrases. We are all in favour of democracy, justice, and the arrival of God’s kingdom on earth. The question is how to get there (and to know when not to go there).
III. “Another World is Possible”: Tariffs and Taxes The efforts to put together a positive programme for change have so far not been very convincing. The activists have rallied around
Klein, No Logo, 442, 441.
the slogan: “Another world is possible”. This phrase defies what they used to call the ‘TINA-argument’ ( acronym of “There Is No Alternative”), but as yet they have struggled to come up with a vision of what that other world would look like, once its possibility set forward. One might object: but what about the huge amount of proposals, suggestions, pamphlets? Let us examine in detail two different sets of practical remedies the anti-globalisation movement has come forward with to resolve the indeed serious problems of the Third World. The first example is the fight against child labour by means of consumer boycotts or trade tariffs, the second the efforts to regulate international capital with the famous Tobin Tax. Economic pressure is often used as a means to reach a political goal. In a globalised world, the most widespread form is to make international trade subject to certain conditions. Usually this kind of protectionism is the work of vested interests and lobby groups. In some cases, especially if it hits the Third World, it gets bad press. The Common Agriculture Policy (CAP) of the European Union is a notorious bête noire. But there is another kind of protectionism that is considered far more presentable. No one will blame a country for taking protectionist measures vis-à-vis another country because that country has unacceptably bad working conditions or condones child labour or doesn’t enough to protect the environment. This possibility was even the dream of the anticorporate movement as described by Naomi Klein; the campaigners wanted to go beyond ‘private’ consumer activism,
Hertz, Silent Take-over, 10.
seize the state apparatus and enforce their moral values by law. This would be the best way to prevent other countries from putting Western firms out of business through inferior social conditions (“social dumping”) or disregard for the environment (“ecodumping”). So when drawing up trade agreements with poor countries, the argument goes, we must insist on provisions about the environmental and labour standards, requiring them to improve these, on pain of our not doing business with them. In the streets of Seattle, this kind of reasoning led to a violent coalition of trade unions with socially committed Third World movements, a coalition that gave an impetus to the anti-globalisation movement as whole. And in the Seattle conference buildings, it was a loose remark by President Clinton in a local newspaper (December 1 1999) about this kind of boycott that led to a deadlock in the WTOnegotiations.3 6 To developing countries this way of thinking came as a protection coupled with a neo-colonist bid to control their policymaking. Low wages and poor environmental conditions are not necessarily the fruit of bad faith.37 Usually the problem is simply that productivity is too low. Wages can be raised as labour becomes more valuable, i.e. in step with productivity, and this can only be achieved through increased investments, better infrastructure, more education, new machinery, and better organisation. If we force these countries to raise wages before productivity has been improved, this will mean firms and consumers having to pay more
As related by EU-trade commissioner Pascal Lamy in an interesting book about his inside experience with WTO and other trade negotiations: L'Europe en première ligne (Paris 2002). It must be noted that it weren’t the street protest that caused the failure of the Seattle WTO-round, as AG-myth wants it, but discord amongst the negotiating partners. 37 Johan Norberg, In Defence of Global Capitalism (Kristianstadt 2001), 180-189.
for their manpower than it is currently worth, in which case they will be put out of business by more productive, better-paid workers in the western world. Unemployment amongst the world’s poor would swiftly rise. As economist Paul Krugman stated in a famous essay, this policy means “good jobs in theory, no jobs in practice”.3 8 Only through trade with us can these poor countries become richer and improve their labour and environmental standards. If we prevent poor countries from exporting to us because their working conditions are not up to our exacting standards, this will result in their export industry being eliminated and their workers instead having to look for jobs in native industry, with lower wages and poorer working conditions. This will not help the world’s poor, but it will help to protect Western industries. Of course one might ask if there are not exceptions. Are there economic conditions so disgusting that we must prohibit trade because of them? The example often quoted is the employment of children. There are today something like 250 million child workers between the ages of 5 and 14. Moral despair about these young suffering lives set aside, the question is: are these children helped by the European Union ceasing to trade with the countries where they live? Not so sure. First of all, 70 percent of child workers are employed in agriculture. Only 5 percent, (some 10 or 15 million children), are employed in export industry. The available sources indicate that these child export workers are the least badly done by, with the least dangerous working conditions. The alternatives might be worse. We tend to forget that only two or three generations ago, child labour was widespread in the Western world. We were at the
Paul Krugman, ‘In Praise of Cheap Labor’, March 1997.
time not more inhumane than we are now. Children in Third World countries are not working because they have nasty parents, but because their family needs their earnings in order to survive. So we cannot forbid child labour in these countries just like that, still less forbid the countries concerned to export products to us, because in that case the children might be forced into even worse occupations – at the very worst, into crime and prostitution. In 1992 it was revealed that the American Wal-Mart chain was buying garments manufactured by child workers in Bangladesh. Congress then threatened to prohibit imports from countries with child labour. As a result of that threat, many thousands of children were sacked by the Bengali textile industry. A follow-up by international organisations showed that many of the children had moved into more dangerous, less well-paid jobs, and in several cases into prostitution.3 9 Clearly, protectionist trade is not the best way to help stimulate better working conditions in the Third World forward. This does not mean there is nothing we can do. On the contrary. We might help to improve poor countries’ labour productivity by sharing our technology and know-how with them (unfortunately, this is not as self-evident as one might hope: in the recent past American unions have tried to stop the transfer of modern technology to the Third World). As regards child labour, a 1997 UN-report aiming at an immediate end to child labour was very critical of consumer boycotts. It stated: “Because the causes of child labour are complex, the solutions must be comprehensive. (…) Strategies to help eliminate and prevent it include: access to
http://web.mit.edu/krugman/www/smokey.html. 39 Carol Bellamy, The State of the World’s Children 1997. Unicef (New York 1997) 23. (http://www.unicef.org/sowc97/). See also Johan Norberg, o.c.
education; wider legal protection; birth registration for all children; collection of information; and mobilization of the widest possible coalition of partners amongst governments, communities, NGO’s, employers and trade unions.”4 0 According to the report, child labour does not result from poverty alone, but from an institutional. Therefore, the measures proposed are aimed at creating a legal framework and a political will in the countries themselves. This approach has indeed also been advocated by some representatives of the anti-globalisation movement. But all too often in ‘the Movement’, moral indignation springing from a prima facie division in rich and poor takes the place of a thorough analysis of the problem. Whenever the anti-globalisation activist is confronted with social or political problems, what will almost always come to his mind are economic remedies (boycotts, tariffs, etc.). Frequently these produce the contrary of the result intended. The second example of a practical solution the anti-globalisation movement has come up with to show that “another world is possible” is the Tobin Tax. This has been the quintessential proposal of the movement since Le Monde Diplomatique in June 1998 put new life into an idea launched in the 1970s by Noble prize economist James Tobin, which he has since famously backed away from. The magazine created the “Association pour la taxe Tobin pour l'aide aux citoyens”, later rebaptized “ Association pour la taxation des transactions pour l'aide aux citoyens”, in both cases better known as ATTAC. One can easily see why the idea of a global tax plays such a central role in the anti-globalisation movement: otherwise a global civil society could not exist.
Bellamy, o.c., 4.
James Tobin’s idea was very simple : it consists of levying a very low tax (of 0.05–0.25 per cent) on all currency exchanges. The purpose was to slow down capital movements and to make investors think twice before allowing capital to cross currency exchange borders. In this way harmful speculation and major crises could be avoided.41 Moreover – and this is the part of Tobin’s plan that seduced his recent French followers – the considerable sums thus generated could be used for the ‘general interest’, for instance, to reduce poverty in the Third World. The powerful moral appeal of the idea is evident. On the one hand: 1.2 billion people in the world living on less than a dollar a day. On the other hand: capital speculators who juggle with trillions without producing anything. Knowing that, indeed, a tax of 0.01 per cent on every capital transaction in the world would raise more money than the actual global amount of development aid, how could one be against such a sublime mechanism to reduce poverty? Especially in France and Belgium the proposal gained real political momentum: French Parliament has accepted the idea of its introduction as from 2003 (on the condition the rest of Europe joins), and the Belgian Federal Chamber of Deputies is about to follow its French sister.4 2 In the European Parliament, a ‘Tobinlike’ proposal was recently rejected by a very small majority. But also in Brazil and India politicians have argued in favour of a tax on currency transactions.4 3
Because of this latter effect even billionaire George Soros was tempted by the plan: the speculator and the philanthropist in Soros went hand in hand… See also his latest book George Soros on Globalization (New York : Public Affairs 2002). 42 At the recent UN Summit on sustainable development in Johannesburg (Sept. 2002), the French rightwing (!) president Chirac himself, although without mentioning the Tobin tax, advocated a “prélèvement de solidarité sur les richesses engendrées par la mondialisation.” 43 An exhaustive paper on all sorts of global taxes, including what they call Currency Transaction Tax (CTT), is Global Taxes for Global Priorities, by James A. Paul and Katarina Wahlberg, published
Nevertheless, the Tobin tax has been the object of considerable criticism, mostly from a technical, economic point of view. Therefore it is inevitable go into some basic economics.4 4 Almost immediately, the difficulty arises that the tax only works if every country in the world participates in the system. But one might argue that this is the case for many international regulations and not a reason to discard the Tobin proposal straight away. More importantly though, the Tobin tax will not yield the two results its inventor promised. Firstly, it is not the right instrument to avoid speculation, because the really disturbing speculative waves are usually driven by expectations of gaining 20 or 30 per cent – and will therefore not be stopped by a threshold of less than 1 per cent. Second, the Tobin tax will not diminish the volatility of the currencies; there will be less transactions but not necessarily a smaller fluctuation. The adherents of the Tobin tax say that what they really want to get at is sheer currency speculation. But the idea of there being some hard boundary between useful investments or trade, and useless speculation is completely false. Derivatives, like options, which the critics usually regard as pure speculation, are necessary in order for investments to work. By buying the right to sell a product at a predetermined price later on (a sale option), a company can concentrate at what it is good at – for instance extracting minerals. Thanks to this insurance the company does not have to bother about changing prices or currency rates all over the world. The people who take over the risk, fulfil a vital role in
March 2002 by the Global Policy Forum and available at UN-site www.globalpolicy.org/socecon/glotax/general/glotaxpaper.htm.
the economic system, but in the eyes of the critics they are the “evil speculators”. This system would be seriously damaged by even a low Tobin tax, because it works with a multitude of daily movements of risk replacement; the oft-quoted 1500 billion dollars of currency exchanges a day consist mainly of these “hedges”. Whatever the shortcomings as regards the functioning of the markets, the Tobin tax would still have one enormous advantage: it would yield tremendous revenues (Attac claims 100 billion dollars a year). Here we come to the real political problem – which is seldom discussed. This problem is: who is going to levy this tax? With what legitimacy? Up till now, only nation-states have been levying taxes (the United Nations, does not, nor does the EU; the organisation lives on contribution by individual member states). As Max Weber understood, the modern state is characterised by the monopoly of force and the fiscal monopoly. The two logically go together: in order to levy taxes, one needs to dispose of the legitimate use of violence. If not, what to do in case someone does not pay? This line of reasoning, when applied to the Tobin tax, leads to the conclusion that a tax that is by definition international, presupposes a global government, and that this government should ultimately dispose of a global army… And then, suppose this immense treasury of ‘Tobin Hood’ would indeed be collected, who will redistribute it? Bernard Cassen? And according to what criteria? In the name of whom? One does not need to be over-suspicious to discern here the most glorious opportunity for the growth of global bureaucracy, a paradise for power abuse and endless chances for corruption.
Contribution Paul de Grauwe (economics professor in Louvain) to a conference on globalisation in
Again, this does not mean there is nothing we can do. In the first place, public funding is not the only way in which money can flow from the rich North to the poor South: foreign investment and private savings are just as important and much more efficient. But then again, the most fundamental issue might not be economic, but a problem of political and legal organisation. Because even if we send the South all the money in the world, it will lead to nothing – and least of all to an automatic ‘development’ of the Third World. It does not really matter whether the money comes from a universal Tobin tax or from the conditional funding of the World Bank and the IMF scorned by the campaigners. For capital transfers to have a positive impact, a huge amount of political and legal work has to be done. In his book The Mystery of Capital (2000), the Peruvian economist Hernando de Soto has explained most convincingly “why capitalism triumphs in the West and fails everywhere else.”4 5 De Soto and his collaborators have done research amongst the poor in cities all over the developing world – Cairo, Manilla, Port-au-Prince, Lima, etc. They have come to the conclusion that the main problem for the urban poor is that they function in an ‘extra-legal economy’. For instance, they usually lack formal property rights for the houses they live in. This means they cannot borrow money to start a small enterprise connected to the legal economy (this right is, in most of these countries, reserved to a minority). Moreover, for bureaucratic reasons, it is often close to impossible to formalise one’s ownership. De Soto’s research team found that in the Philippines, it takes 168 bureaucratic steps and 13 to 25 years to be
Brussels, March 2002. See also Norberg, o.c. 45 Hernando de Soto, The mystery of Capital. Why capitalism triumphs in the West and fails everywhere else (London 2000).
officially owner of your own houses, in Lima 207 steps to complete the first phase out of 5, etc. This would be hilarious if it was not so distressing. The Third World poor are thus cut off from any possibility to get out of their desperate situation; for legal reasons, they are unable to exploit their private property and their capital will stay ‘dead capital’. De Soto, after more than twenty years of world wide investigations, claims the following: “By our calculations, the total value of the real estate held but not legally owned by the poor of the Third World and former communist nations is at least 9,3 trillion dollars. This is a value worth pondering: 9,3 trillion dollars is about twice as much as the total circulating US money supply. It is very nearly as much as the total value of all the companies listed on the main stock exchanges of the world’s twenty most developed countries: New York, Tokyo, London, Frankfurt, Paris, Milan, the NASDAQ and a dozen others. It is more than twenty times the total direct foreign investment into all Third World countries in the ten years after 1989, forty-six times as much as all the World Bank loans of the past three decades, and ninety-three times as much as all development assistance from all advanced countries to the Third World in the same period.”4 6 This is not the place to go further into these figures, nor into De Soto’s interesting historical lessons about how it is that we ourselves are no longer able to perceive the working of ‘capital’ (in short, it is so well integrated into our system that it has become invisible). The important lesson we can retain here from De Soto’s research is that the way out of poverty lies not in naked money transfers from North to South. What is needed is the formalisation
De Soto, Mystery of Capital, 33-34.
of informal property rights. This will be a long and painstaking process, but it is potentially of huge benefit. It needs Third World governments that understand they can gain immense popular support with these reforms, it needs effective collaboration of this most conservative profession, the lawyers, and it needs a general awareness about what is at stake. In short, it needs political will and legal accuracy. It probably doesn’t need western public expressions of moral indignation about the gap between the rich and the poor. And it surely doesn’t need the funds of some global taxation – those are at best irrelevant, and will at worse turn into a disaster.