The WTO - has it a future? Parts 1 and 2

Part One
I believe that there is a great human desire to return to something like the era of the 1960s when the Great Society, building on the foundations of the New Deal, sought to bring a vision of the possibilities of government action to benefit society. This idealism has been subjugated by neo-liberalism, an economic creed of greed and bleakness, of division and gluttony. It is a creed that has fundamentally failed. The WTO was to be the crowning glory of the neo-liberalists, the world’s trade policeman whose function was to copper-fasten neo-liberalism so tightly than the economic theories of Keynes and followers of Keynes could never return. I believe the WTO will die as an organisation because the neo-liberalism at the core of its main agreements is manifestly unworkable. Regional trade agreements are, in my opinion, the way forward. These are proving more popular since many of the world’s developing nations and a considerable number of the developed ones are uncomfortable with the manner the main players in the developed world use the WTO. One only has to look at the history of the Antigua v United States GATS case to see that. But the history of neo-liberalism does not give us a positive to glean from it the way Keynesian economics was what made the Great Society possible. And there was bi-lateral support for the Great Society, since Nixon was no neo-liberal.

In the period between the New Deal and the Great Society, President Dwight Eisenhower occupied the White House and the era is known as one which, apart from the Korean War, was characterised in the main by relative economic normality. The US recovered from the war, Western Europe was rebuilding, Japan was ruled by General MacArthur, China and Russia were in communist isolation and the Cold War was in full swing. Economically, a school of thought was emerging in Chicago which was to challenge everything about Keynesian economic thinking, the New Deal and the Great Society. The Chicago School, out in the cold in the 1950s, were to wait another 30 years before their ideas gained widespread appeal. And it was not the United States where the arch-creed of the Chicago School, monetarism, was to gain a firm foothold initially but in the United Kingdom.

Unlike in the 1930s with Rooseveldt’s New Deal or in the 1960s with Johnson’s Great Society, the government of the United States of today has no grand idea or great vision to benefit society. Neo-liberalism is not designed to benefit society but to abuse it. The benefit is structured to go to corporations. It is difficult to imagine the architects of the New Deal and the Great Society feeling comfortable in the USA of today. They were people who held the belief that government was there to serve the people. The current occupants of the White House demonstrate by their actions that government is there to serve corporations. Society does not exist in the thinking of neo-liberals. After all, it was the great British neo-liberal, Margaret Thatcher, who said there was no such thing as society.[1]

The difference between the instinct that drove the New Deal and the Great Society and the instinct that provides the motor for the neo-liberalist project are worlds apart. Social vision drove the former. Naked greed drives the latter. However, things are changing. The 2008 US presidential campaign will pit two very different candidates against each other. The Republican Party are sticking with a traditional candidate profile; a conservative elderly white man. The Democratic Party is putting forward a candidate of mixed race for the first time. He had to defeat a woman candidate for the nomination. He stresses change as the defining characteristic of his programme. There is such a yearning for change that he has a serious chance of getting elected to the White House. A decade ago this would have been impossible for a candidate of mixed race. It would have been equally difficult for a woman candidate, yet a woman almost got the nomination. Even in America, the birthplace of neo-liberalism, the swing against it is so strong, candidates with non-traditional candidate profiles are achieving success and profiting from the huge unpopularity of this economic dogma.

The conclusion I draw from this is that neo-liberalism is in retreat. The highly political economic theory invented by the Chicago School, enforced by the IMF, the World Bank and more recently by the WTO and espoused particularly by the United States, is now widely discredited. Some believe that the “high-tide mark” of globalization can be dated to 1995, the year of the establishment of the WTO. Since then, neo-liberalism has suffered one defeat after another. If these defeats have not been so noticeable in recent years, it may have something to do with the fact that global geo-politics has become far more important since the attack on the World Trade Centre in New York in September, 2001. Economics is no longer the stuff of front page news except when it has a clear geo-political angle. The rising price of crude oil, for example, is front page news because Russia, after a decade of humiliation, as they perceived it, is now wealthy enough to re-arm and assert its geopolitical importance. The budget deficits currently affecting the United States are newsworthy inasmuch as they find a part of their origin in the Iraq conflict or that China is the owner of large amounts of US government debt. Nevertheless, economics is still important and the critics of globalization are more plentiful than ever before. The IMF cannot go around prescribing the Golden Straitjacket, as Thomas Friedman called the conditions of the Washington Consensus, on countries as part of the conditions of financial aid packages. Fifteen years ago, critics of globalization were looked upon as a ragbag bunch of students, socialists and anarchists. Now a winner of the Nobel Prize for Economics is one of them. Globalisation has been blamed for acts of corporate kleptocracy in companies like Hollinger, Enron and World Com. Executive salaries have swollen out of all proportion to the service given, enabled by the use of deregulation and the establishment of self-serving corporate regulations to normalize the most basic forms of corruption. Normally, when people serve the state in democracies, they are requires to dispose of shares in any company whose activities are likely to create an obvious conflict of interest. Donald Rumsfeld and Dick Cheney were both in this position with their stake in and connection with Gilead and Halliburton respectively, yet both doggedly refused to offload their holdings. This example was followed by many others. Naomi Klein believes[2] the crossover between representatives of state government continuing as representatives or part owners in corporations with a business interest in government activities is a sign of the arrival of a corporatist state, particularly in governments as right wing as the Bush administration, and that neo-liberalism naturally leads to this end.

In Europe too, the trans-national companies were either being burgled by their directors, to the tune of €10 billion in the case of the Italian dairy foods concern Parmalat, or were guilty of false accounting like the Dutch energy company Shell, whose exploration director, Walter van der Vijver, who wrote to his chairman Sir Phillip Watts saying “I am becoming sick and tired about lying about the extent of our reserves”.[3] There are many stories of corporate greed in the era of globalization and some of the excesses are well known. The “Greed is Good” ethos which has prevailed over the last 35 years has, in the last decade, finally been seen to have been fatuous empty rhetoric. Neo-liberalism has led to greater poverty world-wide as it transferred debt onto the state and profits were vacuumed up by the owners of capital in many countries. More and more economists are coming to a similar conclusion to the one Joseph Stiglitz came to a decade ago: neo-liberalism doesn’t work. There are many reasons it doesn’t work but we did not have to wait for the almost collapse of the US financial system to know that. This has been known for years.

(please go to Part 2 of this post.thanks SB)

(Please read part 1 of this post first. Thanks. SB)
Neo-liberalism doesn’t work because it kills competition. One of the great myths of neo-liberalism is that it fosters competition and competition is a good thing. Perhaps it is but neo-liberalism kills competition. Competition involves the tension between price, quality and continuity. Continuity requires the effectiveness of industry working in balance with its efficiency. That in turn should lead to continuity of growth in education and research which in turn should increase the economy’s capacity to raise the sophistication of the tension which indicates competition.

The last 30 years has seen an intensive drive for cost reduction, often by stripping out the structures of employee stability. It has been about selling at the lowest possible price in unstable markets to kill off competition. It has been about selling at high prices in monopolies and oligopolies. It has been about the need to increase corporate size, driving ever onward to monopoly and oligopoly. It is about removing competition. It is about convergence and rationalization. Retail banking nowadays is as much about selling life insurance, merchant banking and other services as it is about traditional banking. Newspaper chains are tied up with television companies. As rationalization reduces the competition and fosters oligopolies, price fixing is never far behind.

Neo-liberalism does not work because it is fundamentally anti-democratic. Part of the water privatisation in the UK involved “preparing” the regional water authorities for privatisation. This process involved, among other measures, the taking out of municipal control the overseeing function and placing that under the aegis of the central government in 1983. As soon as this happened, meetings of the water authority, heretofore public, were suddenly held in private, away from the public eye. In the United States, a significant number of the nation’s hospitals are run by private health corporations from whom information is rarely forthcoming. This is hardly surprising when a criminal investigation into HCA Inc., formerly Columbia/HCA, yielded $1.7 billion in fines for false charges and fraudulent claiming. As they are private companies, the instinct is to hide and cover up information which can harm the company and to resist all attempts to prise it out of the company. In a public system, there is democratic accountability. In neo-liberalism, the privatization of so many public services automatically puts those services in the hands of private companies who, due to the principles governing legal entities and the core tenets of company law, can hide behind the corporate veil. Its activities are not transparent. They are accountable only to shareholders. Most shareholders meetings are confined to shareholders. They are not open to the public and are not televised. Democratic accountability is not available.

Neo-liberalism fails because it removes, sometimes gradually, sometimes not, the middle class from society. The theory goes that there are two classes in society: the owners of capital and those that work for the capital. This differs from the idea of a three class system consisting of the professional/entrepreneurial class, the managerial class and the skilled/semi-skilled worker class. In neo-liberalism, the owners of the capital are the big winners, everybody else end up as the losers, none more so than the middle classes. Anywhere it has been applied, be that Chile, Argentina, New Zealand or the United States, neo-liberalism has created poverty at an astonishing rate. This is done by literally making the middle class smaller by making them poor. In the 1990s, New Zealand had had 15 years of this and changed the electoral system in order to get rid of the type of government that had brought in such an extreme economic policy. The neo-liberal policies pursued by Ruth Richardson resulted in 80% of government assets being sold yet the country's foreign debt more than doubled. The standard of living was stagnant for 15 years. In the area of R & D, the theoretically free market model led to a reduction in private R&D. And, as ever with neo-liberal Friedmanism, there was a growing divide between rich and poor and a shrinking of the middle class. This had a real negative impact on the economy because the middle class are the creators of new capital in every society. The working class has not got the access to the start up finance, the skill set to run a business and the experience needed to ensure its success. The owners of capital have done all this before and are risk-averse with what they have gained. So that leaves the middle class as the pool from which new entrepreneurs emerge. That stopped in New Zealand. This resulted in more emigration of the brightest and the best, a lower level of savings and two full business cycles of boom and bust. 1n 1999, the new government under Helen Clark had to do something. They started dismantling the "modernized" structures put in place by the neo-liberals. They re-regulated where deregulation had produced a free-for-all. They reintroduced apprenticeship programs, they established Air New Zealand again and the rail track, they renationalized workers compensation and got rid of an Employment Relations Act that was a core pillar of the neo-liberal project. The result? Emigration of graduates has stopped, unemployment has been halved, the middle class is being re-established and there is a net growth in population. This isn't "communism" or "socialism" but simply, as Helen Clark put it "the reassertion of traditional New Zealand values of fairness, security and opportunity in public policy." Economics had been allowed to take on the dimensions and characteristics of a religion in New Zealand. Clark’s vision, and that of her countrymen and women who elected her and her government, was to reassert the view that economics is an important servant, not the purpose of society.

Ultimately, the GATS is an unfair agreement in its treatment of public services because it has neo-liberalism at its heart. Along with the GATT and the TRIPS, it institutionalizes an economic theory which is a proven failure. In the home of neo-liberalism, under the present administration in the White House, the numbers thrown into poverty have risen from 31,581,000 (11.3% of population) in 2001 to 36,997,000 (12.7% of population) in 2005,the latest year for which figures are available [4]. In contrast, the number of High Net Worth Individuals in the United Stated grew from 2,270,000 in 2003 to 3,028,000 in 2007[5]. This occurred in an economic boom in the United States.

The inequities of globalization could never be completely removed by the application of a different, single economic theory. But it is clear to me that not just the GATS but the other Agreements that go to form WTO law together with the future of the WTO itself have a very unclear future. The current Doha Round of liberalization negotiations have been running since 2001 with no end in sight and it is my belief that no end will ever be reached. Coupled with the challenge to the authority of the WTO’s role as an enforcer of its own laws represented by the behaviour of the United States in the Antigua gambling case, the pressure on the WTO is increasing all the time. Furthermore, the proliferation of regional trade agreements is a sign of the frustration many nations, particularly in the developing world, feel about their dealings with the WTO. The WTO has more problems than just the accusations of a lack of transparency in its dispute settlement mechanisms to deal with.

If the WTO cannot engage in an open discussion on the possibility and, indeed, the desirability of renegotiating the body of law that forms WTO law in order to remove the unworkable and objectionable elements of those agreements, then I see no long-term future for the organization. Despite its tender age, it has had a lot of growing up to do. It is to be hoped that, as it starts its teenage years, the neo-liberalism at its core is easily removed, like a rotten tooth, rather than a fatal virus against which no antidote is available.

[1] Margaret Thatcher, British Prime Minister, Interview with “Woman’s Own” magazine, 31^st, October, 1987.

[2] „The Shock Doctrine“ Naomi Klein, Penguin Books 2007 pp. 313-314.

[3] The Guardian Weekly (London) 22-28 April 2004 page 11.

[4] US Census Bureau, Historical Poverty Data Report, 2005.

[5] Merrill Lynch-Cap Gemini World Wealth Reports 2004 – 2008.

A fascinating read Slim Buddha. I always like to read material that gives me the feeling that I've learned something, this two-part thread has done that.

I think it difficult, when one tackles such an issue in an environment such as an online forum, where the material gets opened up for discussion, to decide how much to write. Too little, and the subject matter has no hook or direction, and the fish just won't bite. Too much, and the fish are afraid to bite at what might be a larger predator masquerading as a tasty morsel. This post has been fleshed out to perfection and I'm on the hook (I don't mean to say that this is a bait for an argument, it's a bait that engages the mind to examine its own ideas and ideals).

I agree completely with your conclusion (which you usefully pose near the beginning): neoliberalism is in its death throes - at least as a philosophy. We may disagree as to what this means though and we might also disagree as to what facilitated it. To me, the meaning and the facilitator are the same entity. Neoliberalism is pure and unadulterated capitalism, exposed so openly, in its true state, that even the most jaded of us cannot fail to be alarmed. The hook to be found in neoliberalism is so large that the fishing rod is a crane. The bait is huge, beautiful and tantalising - but it's obvious, that to bite down, is to invite destruction. Unfortunately, the hook of neoliberalism was well disguised and at first, it seemed to be many delectable appetisers and thus the hook was swallowed. Only later, did it metastasise.

I think, I may be wrong, Slim Buddha, that you are suggesting that what came before neoliberalism, was benign. If so, I must disagree. I've a tendency to see things in very simple terms. It's both my weakness and my strength - a simple but contradictory complexity, if ever there was one - thus is the nature and fate of man. With regard to capitalism and similar to Nietzche, I see only two possibilities for man (neoliberalism makes this all the more obvious), I see masters, and I see slaves. This viewpoint, I believe is falsely portrayed in the American presidential election. Neither candidate is a slave, both are masters and neither is worth more than the sum of their flesh (in my opinion). Capitalism is slavery. At least in the 'good ole days,' the master housed and fed his slaves. Nowadays, a slave must fuck off and fend for himself with only the scraps left by the master's dog, and indeed, he must fight with the other slaves to get these scraps.

Neoliberalism (again, in my opinion) is the result of a flawed model. Any entity that views competition as its sole motivation is doomed to failure. Such a philosophy seeks to commit genocide of its species, hence the stemming of competition, that's so obvious now.

Thanks for having the patience to read it, Hermes. I tried to present it differently but a two-parter was the only option available to me. Maybe somebody more talented than I can re-configure its appearance.

I am not saying that the system that came before neo-liberalism was more benign but what I am saying is that Keynesianism produced a middle-class which provided managerial talent as employees and small business people as entrepeneurs. I find it ironic that 80s Thatcherism produced the phrase "upwardly mobile" to refer to working class people made good, as it were, when the truth is the evidence all around of middle class people experiencing downward mobility. A tooth and claw capitalist economic theory set the "haves" (owners of capital) against the "have-nots" (those who serve capital)

I will come back to the issue again in how I believe the GATS (which will, in my opinion, be the instrument Mary Harney and her husband will name as the mechanism which justifies their commercialisation of the health service ) is a neo-liberalist document, designed to prevent a reversal of government policy by any successor of hers not of a like mind.

But for now, I would like to see what others may think on the subject.

if this theory is correct, economies such as the Germans, French and Scandinavians should prosper in a stable fashion in the years ahead, since they haven't privatised to the same degree as elsewhere and continue to invest in education. Those who have followed the neoliberal model.... the US, UK and ourselves to some extent, may not do as well.

But there is a complicating factor which represents the nails in the coffin of the WTO....the rising oil price. Anyone with any sense will realise that exporting perishables by air, or heavy goods of any sort, may not be economically sustainable, never mind the environment. This will probably save the North American economies (lots of raw materials, but a long way away from everywhere else), as they'll soon realise they have to start making their own, because it will become cheaper than importing from China, for example.

I would see the long term future of the WTO as being in managing export import deals for expensive but easy to transport items, while food security and transport costs will move agricultural production much closer to home. Hence, we'll have to have more regional agreements and less long distance trade. Never mind which school of economic theory one subscribes to, these are the logical and practical consequences of rising energy costs.

I do wonder whether the recent collapse of the WTO (ostensibly about cotton subsidies) also had a lot to do with some of the more intelligent figuring out that international trade is on the wane anyway. For how much longer will we be able to fly in cut flowers from Kenya?? And wouldn't that land be better used to feed Kenyans than decorating the West?? Or at least, producing food or biofuel as opposed to decorations??

Thanks to Slim Buddha for opening this thread so resoundingly. It would be tempting to drop everything and get stuck into the discussion right now. Work commitments won't permit, so I'll be dropping back in to this whenever I get some time. I am just going to start by quoting one paragraph that I think on its own would merit a lengthy consideration:

Quote :

The last 30 years has seen an intensive drive for cost reduction, often by stripping out the structures of employee stability. It has been about selling at the lowest possible price in unstable markets to kill off competition. It has been about selling at high prices in monopolies and oligopolies. It has been about the need to increase corporate size, driving ever onward to monopoly and oligopoly. It is about removing competition. It is about convergence and rationalization. Retail banking nowadays is as much about selling life insurance, merchant banking and other services as it is about traditional banking. Newspaper chains are tied up with television companies. As rationalization reduces the competition and fosters oligopolies, price fixing is never far behind.

My hypothesis there, that I may struggle to prove, is that the rate of tendency of the rate of profit to fall is the main driver for globalisation and exploitation.

Just to go on a bit, I agree with virtually everything being said about the WTO and the economic system of which it is part.

Where I am not convinced, is whether or not Keynesianism is sustainable any more than neoliberalism is. The perception is, in Britain, that the economy was dying on its feet before Thatcher, due to an old manufacturing base and to the costs of the Welfare State and the wages and conditions won by the Unionised work force. Was that all a con, or was it the case?
New Zealand is interesting but it is very small and quite recent. Is there a successful national economy that we could look at that is a good longer term example of a successful and sustainable 'Keynesian'economy?

good thread, will post in detail later. much food for thought!

cactus flower wrote:

Just to go on a bit, I agree with virtually everything being said about the WTO and the economic system of which it is part.

Where I am not convinced, is whether or not Keynesianism is sustainable any more than neoliberalism is. The perception is, in Britain, that the economy was dying on its feet before Thatcher, due to an old manufacturing base and to the costs of the Welfare State and the wages and conditions won by the Unionised work force. Was that all a con, or was it the case?
New Zealand is interesting but it is very small and quite recent. Is there a successful national economy that we could look at that is a good longer term example of a successful and sustainable 'Keynesian'economy?

I don't believe we are ever going back to the economic policies practiced by the Callaghan government prior to Thatcher because all over Western Europe, the nature of manufacturing has changed. South Wales, the North of England and the Glasgow-Edinburgh corridor were radically transformed by Thatcher whereas North-Eastern France, South Belgium and the Ruhr Valley for example went into a slow decline and the politics of these places changed also. But a form of Keynesianism may make a comeback because something must replace neo-liberalism. Neo-liberalism is dead. My fear is that Ireland will be the last to get the news. I will be keeping a close eye on Merkel. She is interesting and Germany may be the place to produce the successor to neo-liberalism. The have a lot of home-produced problems but eventually these may prove to be useful. If she solves the tax issue, fine-tunes economic regulation and bolsters through economic incentives the large "Mittelstand", or small and medium business sector, then she may stumble on the solution.

This will, however, be too late to save the WTO.

Sorry, cf, I did not address your point about New Zealand. I put NZ in my original post because it was a country similar in size, population and economic fundamentals to Ireland. And it had pure neo-liberalism for 15 years and rejected it comprehensively. Keynesianism? Maybe Germany. Possibly Scandinavian countries. Taxation is the issue here, though. Ard.Taoiseach may have a view on this. If so, I hope he joins the debate.

http://www.finfacts.ie/irishfinancenews/article_1014508.shtml

This report from finfacts brings it home just how political the WTO is: they visited Georgia on August 22nd.

The same report points out to the weakness of Russian technological development and to the fact that the State still owns big natural resource assets.

cactus flower wrote:

http://www.finfacts.ie/irishfinancenews/article_1014508.shtml

This report from finfacts brings it home just how political the WTO is: they visited Georgia on August 22nd.

The same report points out to the weakness of Russian technological development and to the fact that the State still owns big natural resource assets.

From the article, it appears that it was a delegation from the World Bank. I would have been surprised if it had been the WTO. They never leave Geneva.
Having said that, the World Bank, and especially the IMF, are deeply political and follow the Washington Consensus, as articulated by John Williamson in 1989, to the letter.

Slim Buddha wrote:

cactus flower wrote:

http://www.finfacts.ie/irishfinancenews/article_1014508.shtml

This report from finfacts brings it home just how political the WTO is: they visited Georgia on August 22nd.

The same report points out to the weakness of Russian technological development and to the fact that the State still owns big natural resource assets.

From the article, it appears that it was a delegation from the World Bank. I would have been surprised if it had been the WTO. They never leave Geneva.
Having said that, the World Bank, and especially the IMF, are deeply political and follow the Washington Consensus, as articulated by John Williamson in 1989, to the letter.

My mistake Slim Buddha. I'm still a rookie on this, although learning fast under your tuition.

What I say is only my opinion, cf, so don't take it as gospel. However, I do know a bit about the WTO and the enormous problems it is facing. That is why the economic policies of Obama are so important. If he has people around him who are seeing the writing on the wall for neo-liberalism and are preparing for a serious break with the past, then there is a possibility that the era of neo-liberalism is well and truly dead. This would mean a change in policy in the IMF and the World Bank. These institutions will remain no matter what. They have lasted since Bretton Woods. Only the top personnel will change and, of course, the policy direction. The WTO may not survive a serious change in US economic policy. Policy in the IMF and the World Bank can be changed tomorrow morning if necessary. But the WTO exists to enforce its own body of international law. Try changing 60+ economic international laws with nothing to replace them with and the raison d'etre of the WTO is gone.

When Obama picked Biden, a foreign policy wonk, as his running mate, I was disappointed. I understand his political need to do so, insofar as Biden plugs a hole in his CV but the economic agenda remains a closely guarded secret. If the economic policy is neo-liberalism lite, then the WTO will limp on, negotiating Doha till kingdom come. I hope we get to know it soon, but I am not holding my breath.

You mentioned the effects of a weakening dollar in a previous post. The link below may explain why (I believe) the dollars future movements are guided by more than fundamental economic indicators

http://www.serendipity.li/hr/imf_and_dollar_system.htm

Anyway, I hope we can get Ard, youngdan and others on this so we can get a diversity of views and opinion.

I hope so too. I think part of the problem with getting people engaged with the WTO, World Bank and IMF is that they are designed to be opaque. The names sound so solid, virtuous, establishment and dull.

The other is that middle class people in western countries in the past were passive beneficiaries of their activities. We got some of the rewards of having cheap access to commodities from Africa and Latin America.

I am in retrospect impressed by all the people who are aware of what has gone on, and have been active in protesting against it, albeit without much in the way of results.

cactus flower wrote:

I hope so too. I think part of the problem with getting people engaged with the WTO, World Bank and IMF is that they are designed to be opaque. The names sound so solid, virtuous, establishment and dull.

The other is that middle class people in western countries in the past were passive beneficiaries of their activities. We got some of the rewards of having cheap access to commodities from Africa and Latin America.

I am in retrospect impressed by all the people who are aware of what has gone on, and have been active in protesting against it, albeit without much in the way of results.

Don't be so disheartened, cf. South America is way ahead of anywhere else on this. Chavez, Morales, Bachelet, Kirchner etc have run the World Bank and the IMF out of South America. Having sustained over 3 decades of abuse from the enforcers of neo-liberalism, they simply threw them out. Even Rafeal Correa, President of Ecuador, has said that the lease for the US naval base in Guayaquil, set to terminate in 2009, will not be renewed. The US will have to rely on its tame narco-state, Colombia, for a port. Buenaventura?

Now when the IMF arrive in South America, they are laughed at. And then told to leave.

Slim Buddha wrote:

cactus flower wrote:

I hope so too. I think part of the problem with getting people engaged with the WTO, World Bank and IMF is that they are designed to be opaque. The names sound so solid, virtuous, establishment and dull.

The other is that middle class people in western countries in the past were passive beneficiaries of their activities. We got some of the rewards of having cheap access to commodities from Africa and Latin America.

I am in retrospect impressed by all the people who are aware of what has gone on, and have been active in protesting against it, albeit without much in the way of results.

Don't be so disheartened, cf. South America is way ahead of anywhere else on this. Chavez, Morales, Bachelet, Kirchner etc have run the World Bank and the IMF out of South America. Having sustained over 3 decades of abuse from the enforcers of neo-liberalism, they simply threw them out. Even Rafeal Correa, President of Ecuador, has said that the lease for the US naval base in Guayaquil, set to terminate in 2009, will not be renewed. The US will have to rely on its tame narco-state, Colombia, for a port. Cali?

Now when the IMF arrive in South America, they are laughed at. And then told to leave.

I agree. I was only talking about this thread, not the wider world

To me the WTO being told to take a hike was also a transitional moment.

The world is changing very rapidly and is a dangerous but interesting place. Solutions on how to run the place without wars, inequality, environmental degradation and poverty are what we need.

cactus flower wrote:

Slim Buddha wrote:

cactus flower wrote:

I hope so too. I think part of the problem with getting people engaged with the WTO, World Bank and IMF is that they are designed to be opaque. The names sound so solid, virtuous, establishment and dull.

The other is that middle class people in western countries in the past were passive beneficiaries of their activities. We got some of the rewards of having cheap access to commodities from Africa and Latin America.

I am in retrospect impressed by all the people who are aware of what has gone on, and have been active in protesting against it, albeit without much in the way of results.

Don't be so disheartened, cf. South America is way ahead of anywhere else on this. Chavez, Morales, Bachelet, Kirchner etc have run the World Bank and the IMF out of South America. Having sustained over 3 decades of abuse from the enforcers of neo-liberalism, they simply threw them out. Even Rafeal Correa, President of Ecuador, has said that the lease for the US naval base in Guayaquil, set to terminate in 2009, will not be renewed. The US will have to rely on its tame narco-state, Colombia, for a port. Cali?

Now when the IMF arrive in South America, they are laughed at. And then told to leave.

I agree. I was only talking about this thread, not the wider world

To me the WTO being told to take a hike was also a transitional moment.

The world is changing very rapidly and is a dangerous but interesting place. Solutions on how to run the place without wars, inequality, environmental degradation and poverty are what we need.

The World Bank was fatally compromised by having Paul Wolfowitz as the top man. Fortunately he shot himself in the foot with his personal life intruding on his professional position and his position became untenable. But for many in Latin America, that was the point of no return. Enough was enough. The World Bank and the IMF had to go. And go they did. I will come back to this again but be under no illusion that these are respectable institutions. "Mission creep", encouraged by the fans of John Williamson, led them to do things never envisaged for either organisation.

(My laptop sort of died so sorry about the repetition in the thread)

A World Bank study of global poverty was published yesterday. China and the East as well as Latin America achieved very big reduction in poverty. The countries following the IMF recipe for success stayed poor and got poorer. The WB is predicting an increase in poverty due to fuel and food price increases.

http://uk.news.yahoo.com/rtrs/20080826/tpl-uk-worldbank-poverty-20b2d2f.html

Quote :

By Lesley Wroughton Reuters - Wednesday, August 27 12:26 amWASHINGTON (Reuters) - The World Bank said on Tuesday more people are living in extreme poverty in developing countries than previously thought as it adjusted the recognized yardstick for measuring global poverty to $1.25 (68 pence) a day from $1.

1.4 billion people -- a quarter of the developing world -- live in extreme poverty on less than $1.25 a day in 2005 in the world's 10 to 20 poorest countries. Last year, the World Bank said there were 1 billion people living under the previous $1 a day poverty mark.

In 1981, 1.9 billion people were living below the new $1.25 a day poverty line. The new estimates are based on updated global price data, and the revision to the poverty line shows the cost of living in the developing world is higher than had been thought. The data is based on 675 household surveys in 116 countries.

While the developing world has more poor people than previously believed, the World Bank's new chief economist, Justin Lin, said the world was still on target to meet a United Nations goal of halving the number of people in poverty by 2015. However, excluding China from overall calculations, the world fails to meet the U.N. poverty targets, Lin said.

The World Bank data shows that the number of people living below the $1.25 a day poverty line fell over nearly 25 years to 26 percent in 2005 from 52 percent in 1981, a decline on average of about 1 percent a year, he said.

While most of the developing world has managed to reduce poverty, the rate in sub-Saharan Africa, the world's poorest region, has not changed in nearly 25 years, according to data using the new $1.25 a day poverty line. Half of the people in sub-Saharan Africa were living below the poverty line in 2005, the same as in 1981. That means about 380 million people lived under the poverty line in 2005, compared with 200 million in 1981.

CHINA'S POVERTY RATE PLUNGES

Elsewhere, poverty has declined.

In East Asia, which includes China, the poverty rate fell to 18 percent in 2005 from almost 80 percent in 1981, when it was the poorest region. In China, the number of people in poverty fell to 207 million from 835 million in 1981. In South Asia, the poverty rate fell from 60 percent to 40 percent between 1981 and 2005, but that was not enough to bring down the total number of poor in the region, which stood at 600 million in 2005.

In India, the number of people below the $1.25 a day poverty line increased to 455 million in 2005 from 420 million people in 1981. But the share of the population in poverty fell to 42 percent from 60 percent.

cactus flower wrote:

A World Bank study of global poverty was published yesterday. China and the East as well as Latin America achieved very big reduction in poverty.

I think even that is fragile. Enjoying industrial development by selling to the rich nations at cheaper prices on the long term means that:

1) You deplete the industry of those rich nations, ie the purchase power of your clients

2) Your own industry can move to even cheapoer countries, or move when you reach a certain level of work income.

To put it shortly, that is not "economic growth" as we understood it in the traditional national economies of the Western countries. It is still a race to the bottom.

arnaudherve wrote:

cactus flower wrote:

A World Bank study of global poverty was published yesterday. China and the East as well as Latin America achieved very big reduction in poverty.

I think even that is fragile. Enjoying industrial development by selling to the rich nations at cheaper prices on the long term means that:

1) You deplete the industry of those rich nations, ie the purchase power of your clients

2) Your own industry can move to even cheapoer countries, or move when you reach a certain level of work income.

To put it shortly, that is not "economic growth" as we understood it in the traditional national economies of the Western countries. It is still a race to the bottom.

Both of those things have already started to happen. Its also true that the rate of profit in China will decline as people become more skilled and demand higher wages. But I think the point about the World Bank report is that China has been much more successful at spreading the benefits around its population than have other countries - India for example has failed. In the US living standards are lower than 30 years ago, while some individuals have become obscenely wealthy. China is also the only country that has invested in Africa, albeit in close to the usual FDI mode. Chinese people are emigrating to Africa to start up businesses.

I agree that it is very fragile and there is a dangerous overdependency on dollar trade with the US.
But China has a massive population and a lot of resources that make it a formidable centre of growth.