Chang’s book then explores the workings of multilateral institutions (WTO, WB and IMF) and exposes the double standards they impose on countries of the Global South through regulations and conditions that countries of the Global North never followed themselves on their path to economic development. Quite the opposite, actually. And yet, the proponents of neo-liberalization (often operating from the multilateral institutions) behave as if the story of development was one of uninterrupted liberalization and pure free market rule.
Indeed, as Chang demonstrates, this is not the case. Chang illustrates this, for instance, with the fact that it was the first Secretary of the US Treasury, Alexander Hamilton, who came up with the concept of ‘infant industry’. The concept covers the idea that emerging industries should be protected through a variety if regulations until they are strong enough to face competition on the then-international (now global) market. Chang further shows that Western countries indeed exercised enormous protectionism to shield their industries throughout their development. Only once they felt these industries could become internationally dominant did they open their market to international competition.
And yet, the multilateral institutions demand that countries of the Global South open their market, often unconditionally, to global competition and foreign investments without giving these countries the time not just to develop their own infant industries, but even without the solidification of social institutions necessary for a functioning market. The results have been expectedly disastrous, as these institutions themselves have begun to acknowledge.
And let’s not forget the massive agricultural subsidies and intellectual property regulations that countries of the Global North are able to marshal through multilateral institutions while countries of the Global South are prevented from enacting similar measures and sanctioned for doing so.
These few remarks suffice to show that Change is not anti-capitalist or anti-global trade. As mentioned before, he is anti-hypocrisy and double standards. His perspective is more akin to what Manuel Castells calls the “developmental state” (as opposed to “statist” which applies to the former USSR, for instance). Being Korean, it is not a surprise for Chang to adopt such a perspective. Castells indeed demonstrates that the success of the Asian Tigers (Taiwan, South Korea, Singapore, for instance) was based not on openness to the global market but on the support of the developmental state.
All of these countries have had majorly interventionist governments throughout their developmental years. During these years, the developmental states nurtured infant industries, allowing them to not be profitable while growing (Toyota, for instance, was a quasi-bankrupt company for a long time… so was Nokia, for about 17 years). The developmental states limited foreign investment and directed it into specific industries, imposed strong barriers. These countries slowly and progressively opened to the global market when they were ready. For instance, Korea progressively privatized industries once those proved competitive under government ownership. Indeed, the developmental state has been historically the most successful model for economic development.
Based on a developmental conception of the state, Chang then proceeds to debunk, with data, the major tenets of the neo-liberal dogma (as it is promoted with the zeal of religious dogma by the “bad samaritans”). For instance, the idea that government is always less efficient than the market (the current debate about health care in the US provides a nice example of the opposite). Chang also challenges the pillars of modernization theory, especially on the cultural deterministic conception of economic development.
Most of all, Chang’s book is a fairly thorough, data-based, balanced and very readable primer on the global economy, economic history, and global governance. It provides multiple examples from all over the world to expose the basic unfairness of the current regulatory regime (to use Alain Lipietz’s concept).
And, of course, how can one not enjoy a major take-down of Thomas Friedman (although it is like shooting fish in a barrel at this point)?
Many points that Chang makes will be familiar with readers of Manuel Castells (as mentioned above), Joseph Stiglitz or Amartya Sen. Readers will find the same concern for social justice based on rigorous economic analysis. At the same time, Chang also involves social and political factors as they, of course, influence economic decision making and as part of the global governance regime.
For instance, politics and governmentality is important when discussing corruption, often used as a convenient excuse to maintain unfair terms of trade and insufficient levels of aid. Here, to use again one of Manuel Castells’s concept, Chang explores the important of the “Predatory State” as a major explanation for African issues. There is no doubt that African nations have had their share of corrupt dictators that used the means of the state to engage in systematic looting (along with major violations of human rights) of their countries. But here again comes the hypocrisy of Western nations: many of these dictators were installed and supported, often by their former colonizers as part of the neo0colonialist regime. And quite often then, Western nations, now so concerned about corruption, turned a blind eye when a favored dictator engaged in questionable practices.
At the same time, in many developing countries, corruption is what makes things work (something I already discussed here) in the absence of fully developed social institutions regulating social life. And as Chang demonstrates, corruption, in that context, can sometimes even have positive effects on economy and development. So, here again, a balanced view is de rigueur.
This case illustrates as well another failing of the current global governance regime: its imposition of one-size-fit-all programs on developing countries (for instance, through structural adjustment programs) even though the situations in which developing countries find themselves vary wildly.
As I said, one of the strong points of this book is how highly readable it is considering the topic and considering how chock full of data and case studies it is. It addresses all the major issues of the current global system and it is especially relevant in the current context.
"If firms have become so mobile as to make national regulation powerless, why are the Bad Samaritan rich countries so keen on making developing countries sign up to all those international agreements that restrict their ability to regulate foreign investment? Following the market logic, so loved by the neo-liberal orthodoxy, why not just leave countries to choose whatever approach they want and then let foreign investors punish or reward them by choosing to invest only in those countries friendly towards foreign investors? The very fact that rich countries want to impose all these restrictions on developing countries by means of international agreements reveals that regulation of FDI is not yet futile after all, contrary to what the Bad Samaritans say." (98)
Ha-Joon Chang, Bad Samaritans – The Guilty Secrets of Rich Nations and The Threat to Global Prosperity.
Courtesy of Ha-Joon Chang, from his book, Bad Samaritans:
"I have a six-year-old son. His name is Jin-Gyu. He lives off me, yet he is quite capable of making a living. I pay for his lodging, food, education and health care. But millions of children of his age already have jobs. Daniel Defoe, in the 18th century, thought that children could earn a living from the age of four.
Moreover, working might do Jin-Gyu’s character a world of good. Right now, he lives in an economic bubble with no sense of the value of money. He has zero appreciation of the efforts his mother and I make on his behalf, subsidizing his idle existence and cocooning him from harsh reality. He is over-protected and needs to be exposed to competition, so that he can become a more productive person. Thinking about it, the more competition he is exposed to and sooner this is done, the better it will be for his future development. It will whip him into a mentality that is ready for hard work. I should make him quit school and get a job. Perhaps I could move to a country where child labour [sic] is still tolerated, if not legal, to give him more choice in employment.
I can hear you say I must be mad. Myopic. Cruel. You tell me that I need to protect and nurture the child. If I drive Jin-Gyu into the labour [sic] market at the age of six, he may become a savvy shoeshine boy or even a prosperous street hawker, but he will never become a brain surgeon or a nuclear physicist – that would require at least another dozen years of my protection and investment. You argue that, even from a purely materialistic viewpoint, I would be wiser to invest in my son’s education than gloat over the money I save by not sending him to school. After all, if I were right, Oliver Twist would have been better off pick-pocketing for Fagin, rather than being rescued by the misguided Good Samaritan Mr Brownlow, who deprived the boy of his chance to remain competitive in the labour [sic] market.
Yet, this absurd line of argument is in essence how free-trade economists justify rapid, large-scale trade liberalization in developing countries. They claim that developing country producers need to be exposed to as much competition as possible right now, so that they have to incentive to raise their productivity in order to survive. Protection, by contrast, only creates complacency and sloth. The earlier the exposure, the argument goes, the better it is for economic development." (65-6)
Unsurprisingly, things will not improve as yet another unfavorable trade agreement with the European Union is about to be implemented. Under the guise of "free trade", subsidized EU agricultural products will undercut local products.
For multiple reasons, of course, something I will touch upon in my review of Stealth Conflicts. But what is obvious is that scale is not the issue, otherwise, 1 billion hungry people would deserve front page, compared to 200 dead in Gaza (as horrific as it is). In most media, and especially in the US, it is a simple morality play: innocent Israel is defending itself against evil Hamas. In Europe, and especially in left-wing circles, fascist Israel is killing innocent Paslestinians. Of course, no one dares touching the fact that it is the clash of two types of religious fundamentalism that bear a big part of responsbility here. Also, the power differential is so great between Israel and Hamas that they cannot be equated.
On the other hand, our 1 billion hungry people, that is a more complicated story for Western audiences with short attention span:
Not to mention that hunger deaths are slow and unspectacular deaths in a world of sensationalist global media whereas blowing up stuff ("shock and awe") has greater visual impact. Mass violence rates better than structural violence.
Also, governments in general have an interest in getting coverage for things they can benefit from: the US government will never miss an opportunity to defend Israel (heck, Obama was genuflexing even before being elected) against terrorists. European governments want to appear to be defending the rights of both sides.
When it comes to hunger, no one wants to discuss the reasons for the high costs of food, agricultural subsidies or unfair trade policies that strangle the agricultural sector in developing countries or indeed, the strage fact that hunger is not connected to food shortage. The West might appear less than noble here.
Just as I was reading the article I shall discuss below on the need to reform the Washington Consensus system, I saw this great and very relevant cartoon that Carlos Serra had posted on his blog and I could not resist (other great comics by Gado are available on his website):
The article by David Held I wanted to discuss here is"At The Global Crossroads: The End of the Washington Consensus and The Rise of Global Social Democracy?" in Globalizations, May 2005, Vol. 2, No. 1, pp. 95-113. Held is well known for his conceptualizations on global governance as he has published extensively on the subject. The article offered here is, to put it simplistically, a short version of his book Global Covenant: The Social-Democratic Alternative to the Washington Consensus.
Held’s conception of globalization is increased interconnectedness that created overlapping communities of fate as opposed to discrete national communities of the Westphalian order. Globalization is multi-layered and is not just economic, but political and cultural as well. The question of global governance is especially crucial for Held as greater interconnectedness involves a greater reach of a body of international laws dedicated to the promotion of justice. A great deal of this body of human rights juridical activity came about after World War II and the Holocaust.
"[Those involved in drafting these universal principles of human rights] rejected the view of national and moral particularists that belonging to a given community, limits and determines the moral worth of individuals and the nature of their freedom, and they defended the irreducible moral status of each and every person. The principles of equal respect, equal concern and the priority of the vital needs of all human beings are not principles for some remote utopia; they are at the centre of significant post-Second World War legal and political developments." (96)
The global crossroads mentioned in the title of the article refer to the dilemma faced by the international community: promote and extend this human rights regime, or let be eroded and dismantled. And Held is rather pessimistic (remember, that was in 2005 although I don’t think there is much reason to be more optimistic now). For Held, the human right regime is particularly threatened by four crises:
1. The collapse of the Cancún trade talks
And the correlative rise in bilateral and preferential trade agreements. This goes back to the fact that the global trade system is rigged against developing countries and therefore is of questionable legitimacy.
2. Little progress on the Millenium Development Goals
I have blogged extensively on the MDGs and the lack of progress is attaining these goals is a massive failure of the moral conscience of the international community. I would add that this is even more shameful now considering that the cost of reaching these goals does not compare to the money poured into the financial system to rescue the developed economies.
3. Little progress on a sustainable framework to deal with global warming
And the lack of real progress at Poznan shows that this is still an issue today and we are already witnessing some of the effects of this in the form of more frequent violent storms, resource wars (especially for water, oil and land) as well as climate migrants and refugees.
4. The threats to the multilateral order by the unilaterialism initiated by the US in Iraq
Incidentally, the change in administration might not change much on that. The additional problem is that other countries can use the same doctrine to go it alone against defined enemies, further undermining the multilateral order and weakening the UN system.
All these crises are both symptoms of increased interconnectedness and crises that threaten the global order. According to Held, what is missing is greater integration and greater commitment to social justice. This is so for two main reasons: the Washington Consensus and the Washington Security Agenda.
The Washington Consensus
This one is well known and rather well defined. It is understood as the underpinning of the global spread of global capitalism through liberalization. The Washington Consensus was promoted and pushed though global institutions such as the IMF and the World Bank who imposed conditions – structural adjustments – on developing countries, forcing them into integration into the global market.
This Washington-driven economic agenda has come under heavy criticism for a number of reasons and after years of being forced on developing countries, it does not have much to show for it. Held (99) cites three major points made by Branko Milanovic (2003: 679):
How to explain why after sustained involvement and many structural adjustment loans, and as many IMF Stand-bys, African GDP per capita has not budged from its levels of 20 years ago. Moreover, in 24 African countries, GDP per capita is less than in 1975, and in 12 countries even below its 1960s level;
How to explain the recurrence of Latin crises, in countries such as Argentina, that months prior to the outbreak of the crisis are being praised as model reformers;
How to explain… ‘pupils’ among the transition countries (Moldova, Georgia, Kyrghyz Republic, Armenia), after setting out in 1991 with no debt at all, and following all the prescriptions of the IFIs, find themselves 10 years later with their GDPs halved and in need of debt-forgiveness.
So, on the one hand, the Washington Consensus failed many developing countries and at the same time, the countries that have experienced growth and development are those that stayed outside of that system (China and the emerging Asian tigers as well as India, for instance).
"There is much evidence to suggest that a country’s internal economic integration – the development of its human capital, of its economic infrastructure and robust national market institutions, and the replacement of imports with national production where feasible – needs to be stimulated iniitally by state-leg economic and industrial policy. The evidence indicates that higher internal economic integration can help generate the conditions in which a country can benefit from external economic integration (Wade, 2003). The development of state regulatory capacity, a sound public domain and the ability to focus investment on job creating sectors in in competitive and productive areas is more important than the single-minded pursuit of integration into world markets." (100)
The Washington Consensus has eroded the state capacity to promote internal integration, promoted the misleading view that there is only one path to development and growth and aggravated the major asymmetries of global market access and power and therefore made things worse for developing countries.
"Leaving markets to resolve alone problems of resource generation and allocation misses the deep roots of many economic and political difficulties; for instance, the vast asymmetries of life chances within and between nation-states which are a source of considerable conflicts; the erosion of the economic fortune of some countries in sectors like agriculture and textiles while these sectors enjoy protection and assistance in others; the emergence of global financial flows which can rapidly which can rapidly destabilize national economies; and the development of serious transnational problems involving the global commons. Moreover, to the extent that pushing back the boundaries of state action or weakening governing capacities means increasing the scope of market forces, and cutting back on services which have offered protection to the vulnerable, the difficulties faced by the poorest and the least powerful – north, south, east and west – are exacerbated. The rise of ‘security’ issues to the top of the political agenda reflects, in part, the need to contain the outcomes which such policies provoke.
The Washington Consensus has, in sum, weakened the ability to govern – locally, nationally and globally – and it has eroded the capacity to provide urgent public goods. Economic freedom is championed at the expense of social justice and environmental sustainability, with long-term damage to both. It has confused economic freedom and economic effectiveness." (102)
Attempts at reforming the Washington Consensus have been meek and unconvincing. For Held, the alternative lies with a social-democratic approach. Held defines social-democratic view as follows:
"Traditionally, social democrats have sought to deploy the democratic institutions of individual countries on behalf of a particular project: a compromise between the powers of capital, labour and the state which seeks to encourage the development of market institutions, private property and the pursuit of profit within a regulatory framework that guarantees not just the civil and political liberties of citizens but also the social conditions necessary for people to enjoy their formal rights. Social democrats rightly accept that markets are central to generating economic well-being, but recognized that in the absence of appropriate regulation they suffer various flaws, especially the generation of unwanted risks for their citizens and an unequal distribution of those risks, and the creation of negative externalities and corrosive inequalities." (103)
The problem is then how to extend social-democratic policies on a global scale in the context of diminished capacities of the states. That is the major challenge for Held: how to create a global social democracy based on transparency, accountability, commitment to social justice, equitable distribution of life chances, public management of global flows of various sorts, corporate governance and environmental sustainability. Held provides a fairly detailed laundry list to make this happen. And, again, the question of cost is no longer a valid one in the context of massive bailouts.
The Washington Security Agenda
For anyone who has been following the doctrines of the Bush administration, this is a familiar story of the US policy after the terrorist attacks of 9/11. The choice faced by the US government was to either strengthen the multilateral order or to undermine it. We all know which path the administration chose.
"After 9/11, the US and its major allies could have decided that the most important things to do were to strength international law in the face of global terrorist threats, and to enhance the role of multilateral institutions. They could have decided it was important that no single power or group should act as judge, jury and executioner. They could have decided that global hotspots like the Middle East which feed global terrorism should be the main priority. They could have decided that the disjuncture between economic globalization and social justice needed more urgent attention. And they could have decided to be tough on terrorism and tough on the conditions which lead people to imagine that Al-Qaeda and similar groups are agents of justice in the modern world." (106)
They decided none of these things and the rest is history with side effects with long-term impacts and none of the issues above addressed.
In other words, both the Washington Consensus and the Washington Security Agenda are massive failure and this is even more visibly true now than it was when Held wrote his article. But Held does not end with this pessimistic diagnosis. He offers specific prescriptions for a global social-democratic agenda based on some basic principles:
Commitment to the rule of law and development of multilateral institutions
Generation of new forms of legitimacy for global political institutions for security and peace-making
Acknowledgment that ethical and justice issues based on the global polarization of wealth, power and income, the asymmetries of life chances
None of these can be solved by the market. Similarly, security must be reconceptualized from a narrow conception (protection from coercive power and violence) to a broader meaning (economic, political and environmental protection especially for the vulnerable). So, indeed, what Held suggests is a global social covenant to promote fair trade rules, more democracy at the global level, a more just and equitable world order. This is also means a more open mode of governance including the global civil society.
Held was indeed prescient when he wrote this article and the current disastrous financial and economic conditions should, if reason prevailed, mark the end of the Washington Consensus and the final days of the Bush administration should also be the final days of the Washington Security Agenda. However, Held was somewhat pessimistic then, and there is no reason to be less so now. Leadership on these issues will not come from the US. According to Held, the only other likely candidate for such leadership is Europe.
In addition to the plenary session which I’ll talk about below, I attended a couple of teaching workshops sessions that are probably of interest only to me, but they provide me with materials for
Things that suck and make me run out of the room within the first 20 minutes of a session
Notes to my presenting colleagues: please, do NOT read the 50-page research paper you’ve written, thinking you can cram it all within the 15 minutes allotted to you… it’s BORING, incomprehensible and deadly especially for an 8:30am session to someone like me, that is NOT a morning person at all.
Oh, and I know we’re supposed to hate and trash powerpoint, but you know what, having the basic points of your paper on slides REALLY help keeping track of what you’re talking about and where you’re going (however, kudos to Bruce Western who took the whole powerpoint presentation to a whole new level of fancy editing and transition and animation!)
However, if you do use a powerpoint presentation, please check BEFORE that the background color you use for your slides will not make your audience’s eyes bleed.
Things that totally rock!
Meeting someone whom I already consider a friend, VastLeft! We had
matching polo shirts (not intentional, I swear, although he had told me what he would wear, I just picked the shirt at the top of pile in my suitcase)
a nice lunch
a great conversation
VL was, of course, a perfect gentleman (although between blog posts and comments, it’s like I already knew him).
I had a great time. I hope he did too and that we can do that again!
Imagine that: a panel on a serious issue where the panelists are asked intelligent questions and where they have the time to respond and no one interrupts them until they’re done so that they can establish context and background to their answers… what a concept!
Bottom line: the current immigration situation is absurd: the backlog at the INS, the stupid wall, the militarization of the border, the raids, all these things, according to Doug Massey to increasing illegal immigration into the US… before the current trend of nativism (which increased after 9/11… never mind that Mexico has never been a base of terrorism, no terrorist has ever come from Mexico… as far as terrorism is concerned in North America, the US should look North: Canada… there are real cells there and there is recruitment going on).
How has this increased immigration? Because the strengthening of border controls makes it difficult for Mexican to enter the US but it also makes it hard for them to go home the same way. Before the current situation, individual men would come, work here for years, send back remittances. Some of them would settle but many would return. Now, it is entire families who come undocumented, because they know it is going to be hard to return. This situation creates hybrid families as far as immigration status is concerned. One spouse may have a visa but not the other, some of the children were brought over from Mexico (therefore undocumented) while others are born in the US.
The result is that whereas the Latino population used to be concentrated in the Southwestern states (where there are still in large numbers), they are now in the 50 states and especially in the South (Massey conducted studies in North Carolina, among other states) where nativist reactions have been quite strong.
Everyone on the panel agrees that there is no such thing as the status quo, just a lousy and absurd situation and that there will be no resolution until the change of the guard in the executive, whoever that happens to be. At the same time, immigration will probably not be a big topic in the campaign: McCain is at odds with his base on this (which means he’s not an insane nativist convinced that La Reconquista is on the way and La Raza is its 5th column) and Obama cannot take any chances with Latinos since they can give him a 6% (Latinos are 9% of the voting population, and Obama should get about 70% of them) advantage right off the bat (that was Castaneda’s point, of course, he stated, it’s not what matters but still) whereas McCain seems to have already conceded the Latino vote.
Both agree that any immigration reform will include some components: regularization for some undocumented, guest work program (the right wants what amounts to indentured servants by giving employers the visas, whereas Massey is a big promoter of giving the visas to immigrants and let them find their niche on the labor market).
Castaneda stated that no immigration policy can be separated from policies to push for the development of Mexico… right before the Bush administration took office in 2000, Castaneda and his groups discussed this with them. The Bush administration refused to consider the development side of things, just the immigration side… with great results (is there anything these people haven’t totally FUBARed? Don’t answer that) but Castaneda means that this is essential and if the powers that be are so concerned about immigration, then they should put their money where their mouth is.
What about the argument that the American people would never go for that? That Americans don’t want to pay for foreign development and that the US is not in the business of developing countries? Well, there is ample historical evidence to the contrary from the Marshall Plan to the Iraq War and lots of examples in-between. Massey added that it works, citing the case of the Spanish and Portuguese integration within the European Union.
The story here is that there is a persistent wage gap between Southern and Northern Europe. When Portugal and Spain were considered for membership into the EU, they had to undergo drastic structural adjustments. At the same time, the EU poured a lot of money into the economies of these countries so that when they became part of the EU, with open borders, the shock would be more easily absorbed, there would be no massive emigration out of Portugal and Spain. It worked. Actually, Portuguese and Spanish ex-pats returned.
Finally, when it comes to immigration reform, recent history shows that piecemeal legislation does not work. It has to be the whole package or nothing.
"Demand for land to grow food, fuel crops and wood is set to outstrip supply, leading to the probable destruction of forests, a report warns."
The report in question was drafted by the coalition Rights and Resources Initiative focused on global forest policy. They advocate sustainable management of forestry as well as respects for the people living in and from the forests in their rights not to be forcibly displaced by logging companies who deprive them of their livelihood. As stated in the BBC,
""Arguably, we are on the verge of a last great global land grab," said RRI’s Andy White, co-author of the major report, Seeing People through the Trees.
"It will mean more deforestation, more conflict, more carbon emissions, more climate change and less prosperity for everyone."
Rising demand for food, biofuels and wood for paper, building and industry means that 515 million hectares of extra land will be needed for growing crops and trees by 2030, RRI calculates.
But only 200 million hectares will be available without dipping into tropical forests."
Well, for logging companies and well as the biofuel and ranging sector, there is no problem: let’s just tap into these ttopical forests. But this would make climate change worse since deforestation already accounts for 20% of carbon emissions. But the need for both fuel and food has triggered land speculation and whatever the global financial markets want, they usually get. It is a very unequal battle between Big Money and the rights of indigenous people to land.
The bottom line is the question of ownership. Who owns the trees? Who owns the land? We already know that land tenure issues are a major source of conflict. RRI advocates community ownership in order to promote indigenous peoples’ rights, livelihood through sustainable forest management and pro-poor growth through community development. As their site states,
"An estimated 350 million indigenous and tribal peoples are at least partly dependent on forests, including some 60 million who are substantially dependent on forests for their subsistence and livelihoods. Forests are also particularly important to poor women, who shoulder much of the burden for hauling wood and collecting and marketing forest products.
Dominant models of forest industry and conservation have often exacerbated poverty and social conflicts and have precluded pro-poor economic growth. The lack of clear rights to own and use forest land, develop enterprises, and trade in forest products has driven millions of forest dwellers to poverty and encouraged widespread illegal logging and forest loss.
The world will not meet national and global goals to reduce poverty and protect the environment unless poor peoples’ rights to land and resources are strengthened. Neither will the world effectively mitigate or adapt to climate change without clarifying local tenure and governance. The next two decades are critical–both for the poor and for the forests.
There are reasons for optimism. Organizations of indigenous peoples and forest-dwelling communities are gaining voice and opportunity, and after decades of limited action many countries are beginning to consider far-reaching legal and policy reforms. There is a major opportunity to advance the rights and livelihoods of forest peoples by establishing the institutional foundations for sustained conservation and forest-based economic development."
Watch this first amazing video. It is 16-minute long but worth every second (and see this BBC background page):
Those of us old enough to have lived through the 1983 remember Bhopal as a major industrial disaster. On December 3, 1984, a Union Carbide pesticide plant (UC was bought by Dow Chemical in 2001) released poisoned gas that killed an official estimate of approximately 3,800 people (actually doctors on site claim that 15,000 died within a month). Over 500,000 have been affected by inhaling the gas.
Via Le Monde, everybody hates tax havens but they do not exist at the margins of the global financial system. If anything, they are an integral part of it and every year, billions of dollars land there. They are an integral part of the infrastructure of international finances.
What circulates through tax havens? Clean and dirty money (proceeds from illegal activities that end up there for purposes of money-laundering), tax-evasion money. Tax havens were allowed to prosper by all the economic powers, but now, they are worried because they have realized that these havens make funding terrorism easier and more discreet. In the past months, we also discovered that these place facilitate tax fraud on a grand scale, as the case of Liechtenstein where more than a thousand Western people deposited their funds. So, it is not really a surprise that this topic has come up at the G8 meeting.
Organized crime has gone global. That is an accepted fact but it makes life for national anti-mafia services miserable. Going global has done for organized crime what it has done for transnational corporations: it has made these groups more powerful, more flexible; it has given them a greater reach into markets they did not yet have access to; it has allowed them to make connections with other "like-minded" groups whereas before, such contacts would have been limited by geographical distances and barriers.
Moreover, the liberalization of trade and capital as well as the removal of effective border controls within specific regional blocs, such as the European Union, has made circulation of illicit goods and services even easier and more lucrative. Criminality thrives in unregulated environments and failed / failing states. What’s not to love about globalization?
None of this has gone unnoticed, of course, and we are starting to see now real signs of concerns regarding the expanding activities of organized criminal networks, as illustrated by a flurry of articles all over the press across continents.
Poto Mitan means "central pillars" in Kreyo (Haitian Creole) and it is clear that this is in reference to the women presented in this film. These are women who struggle with the familiar problems women face in the Global South: poverty, raising kids alone, working in factories for global brands for low wages (roughly $1.80 per day) and horrific working conditions. Add to that the sexual violence and harassment that these women experience when they try to fight back and organize through unions or other structures.
As bad as it is, it becomes even worse when the factories close their doors for good, leaving these women with no sources of income. Why do the factories close? Because global capitalists do not like unstable countries. They much prefer authoritarian regimes who can keep people (that is their generally feminine workforce) in line and Haiti has had its share of political turmoil and violence in recent history, including brutal food riots a few months ago. Also, since China gained greater access to the world through the World Trade Organization, a lot of other, albeit, poor countries cannot compete with cheap workforce and cheap exports (and again, a stable country managed by a regime that cares very little for human and workers rights).
So, the women of Haiti, especially those who live in the Cite Soleil, a slum on the outskirts of Port-au-Prince, try to figure out how to survive. It is this struggle that the movie powerfully conveys.
Even though we were presented a rough cut, the film already looked incredibly professional. The interviews with the women were very powerful even though it seems that we have heard these stories the world over as the problems these women face seem universal. I guess that is one of the characteristics of globalization: to create common problems for certain categories of people who then have to dig and tap into their national and cultural resources to solve them. Especially considering the fact that globalization presents a basic survival problem for women and their children in many parts of the Global South.
As Mary Hawkesworth aptly stated, globalization is a gendered phenomenon. (Deeper development on Gender and Globalization can be found here .)
The film also illustrates several other dilemmas of globalization:
The fact that as bad as factory jobs are, they are often better than ekeing out a living in environmentally stressed rural areas, as is especially the case in Haiti.
Also, the fact that one major relationship of power in the global era is between highly mobile capital and fixed labor: these women have nowhere to go whereas factories are easily open and closed pretty much anywhere in the world depending on which places owners find desirable locations. And right now, Haiti is not desirable at all. This is one of the major imbalance of power that clearly puts labor at a massive disadvantage.
But the women in the film, like so many women around the world, have no choice but to fight to find imperfect solutions to problems not of their own making.
In his presentation, Robinson contrasted his approach to globalization as qualitatively different phenomenon (transnationalism) as opposed to the school of thought he labeled "new imperialism." Robinson’s view of globalization involves specific features:
the rise of truly transnational capital with integration of all countries into that system;
the rise of the transnational state (TNS) where class power is exercised through networks and by the transnational capitalist class (TCC – especially its political / executive component);
the development of new relations of power and inequalities on a global scale
the increased power of the transnational corporation (TNC)
So, for the maths-oriented among us: Globalization = TNS + TNC + TCC = true transnationalism.
What we are seeing then, for Robinson, is a reconfiguration of the power of the nation-state as agent of the TNCs, TCC and TNS. The nation-state does not disappear but is displaced in influence. It is one level of power that transnational agents use for their own purposes, for instance, when countries that are members of the EU use their national institutions to implement transnational directives coming from above (the EU level) or when countries again use national institutions to enforce WTO rulings.
This system, though, is in crisis on several levels:
Via Lucy Siegle in the Guardian … the lady is running out of patience:
"I am unmoved by Primark’s plight. So, the retailer was badly ‘let down’ by three Indian factories that contravened the company’s ‘strict ethical standards’ by outsourcing the embroidery of 20,000 on-trend pieces to small children. Retailers and brands have been offering excuses for years now, ever since the Chicago Tribune rumbled a major sportswear manufacturer using child labour in 1996. Similarly there’s a wide selection of pleas to cover the times a brand gets caught running up this season’s collection in a sweatshop – varying from downright denial or rebuttal to Gap’s surprising, ‘listen guys, we have a problem and we will fix it’ (circa 2005). (…)
The company points out that this unfortunate use of child labour was not in any way connected to the low price of the fashion it sells – apparently achieved by low mark-ups and big volumes.
I still feel uneasy. While there is no doubt that value retailers shift a lot of product, there is plenty of evidence and testimonies from garment workers to show that the pressure and speed of orders directly adds to the misery of working conditions. In the latest edition of Clothingsource, a tool for the mainstream garment trade, sourcing expert Mike Flanagan worries that, as China runs short of workers, there will be a slide back into the use of child labour."
It is a familiar story for anyone involved in global labor issues. The big brand usually hide behind several layers of sub-contractors which provide them with plausible deniability along with the big profits. That story has been told over and over by activist groups such as the National Labor Committee (the group that made Kathy Lee Gifford cry on national TV because her kids might learn that her company used sweatshops and child labor… those labor rights bastards! It will be all their fault if KLG’s kids are traumatized).
And as Lucy Siegle states, these companies have become very creative when it comes to making excuses for their labor practices. So, they may not be the ones actively recruiting children and cuffing women to their sewing machines, but they either exercise willful ignorance or just turn a blind eye because it is highly profitable and the industry of giant retailers (with Wal-mart at its head) is highly competitive.
At the same time, in the global context, peripheral and semi-peripheral countries are full of desperate people for whom factory work actually represents economic opportunity and where the governments compete with each other to provide the greatest incentives for factories and capital to land within their borders: hence the maquiladoras and free trade zones cropping up all over Central and South America as well as all over South and South East Asia.
And the very fact that it takes daring and persistent journalists and activists to get to the bottom of labor practices in the semi-periphery and the periphery is quite revealing when it comes to the standards of the industry.
"In an industry of scant transparency, you can imagine how difficult it is for the handful of journalists who operate in this area to get solid evidence of exploitation. And yet they unearth horror stories with alarming regularity. This leads me to the depressing conclusion that the stories we see represent the tip of the iceberg rather than the exceptions.
If these ‘abuses’ are just a reality of today’s outsourced, mass-market rag trade, then it’s time retailers told us. How about a label in the must-have sun dress that reads: ‘We have absolutely no idea who made this garment because all production was outsourced to low-cost suppliers in Asia.’ Then, consumers could make a real decision about what they put in their wardrobes and whether to take the risk that a child embroidered the hem.
That way we wouldn’t have to listen to retailers competing with each other on the basis of how many ‘audits’ they do. These are famously unreliable. We are constantly told cheap-as-chips fashion is a democratiser of style and many retailers now like to add a rail of organic cotton T-shirts to show how ethical they are. Do I buy this? No, but neither can I bring myself to buy their clothes."
And just in case we are not clear on what we are talking about here, let’s review: