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 For Humanity And Against Market Fundamentalism

For Humanity And Against Market Fundamentalism

By Richard Pithouse - Department of Philosophy, University of Durban-Westville, Durban, South Africa.
The social milieu affects the content of philosophy, and the content of philosophy seeks to affect the social milieu, either by confirming it or by opposing it. - Kwame Nkrumah

Ednote: (This was written for a Durban newspaper by Richard Pithouse & replaced with a paid advertisement by the World Economic Forum. How's that for freedom of choice & a free democratic media?)

Globalisation is the increasing interconnectedness of humanity across space due to the continual progression of technology. It is an inevitable consequence of human creativity and intelligence. We are all, already, products of globalisation. Globalisation is neither good nor bad in-itself. It just is. It carries the potential for a remarkable expansion in human freedom and solidarity. And it also carries the potential for conquest, domination, exploitation and impoverishment. It is our responsibility to choose the vision and principles that will guide our response to the growing interconnectedness of humanity.

After the collapse of the Soviet Union one vision came to dominate thinking about globalisation. It was given many names (neo-liberalism, The Washington Consensus etc.) but the economic model that has been imposed on most of the world, through organisations like the World Economic Forum, the IMF and the World Bank is best described as market fundamentalism. Market fundamentalism is, in essence, the imposition of a global 'freee market' in which regulation by governments is radically diminished. There are some important exceptions to this 'freedom' though. For example while money and the rich can move freely between countries the movements of the poor are still regulated by razor wire, searchlights and men with guns. Another example would be the extension of patent 'rights' which privatises the ownership of knowledge, some of it life-saving and much of it produced with public funding at universities.

After the Second World War many countries had partially or largely subordinated the market to society via the instruments of democratic regulation. But after the collapse of the Soviet Union societies were increasingly subordinated to the market via the instruments of American imperialism (IMF, World Bank, WTO etc.) and in accordance with the desires of local elites.

Many people bought into the idea, punted with evangelical zeal, that all regulation of the market is pernicious political interference and that the natural state of the market is to be free. It was also widely believed that free markets are inherently democratic and that they inevitably lead to prosperity. But in 2001 everyone with eyes to see knows that these ideas are every bit as utopian and as abstracted from reality as orthodox communism.

They are also founded on a basic error. Every economic historian knows that, as John Gray, puts it: "Regulated markets are the norm, arising spontaneously in the life of every society. The free market is a construction of state power....Since the natural tendency of society is to curb markets, free markets can only be created by...strong government."

It is also clear that there is no necessary connection between democracy and free markets. On the contrary shifting power away from elected governments to unelected corporations is an obvious threat to democracy. A simple example of this is the development of huge media conglomerates that radically reduce the number of voices in the media. This could easily be prevented, and democracy served, by regulations limiting the number of newspapers or radio and television stations that one organisation is allowed to own. Another example of the threat that unregulated capitalism poses to democracy is that the big pharmaceutical companies are able to spend $75 million a year lobbying US lawmakers, spent an extra $24 million on the 2000 US presidential elections and employ one pharmaceutical lobbyist for every two members of Congress. Clearly they have far more power than the people whose lives depend on access to their 'products'. And corporations use this power to reduce citizens to clients.

Moreover democracy is an inherently collective project. It assumes a society. But the unregulated free market is profoundly anti-social. Margaret Thatcher wasn't just shooting the breeze when she denied that there was any such thing as society. Her heirs still seek to treat every individual, family and unit of social organisation as a business in competition with other businesses. They strive to overcome all sense of the collective, of society, of obligation beyond profit. The market is encouraged to hunt for profit in every sphere of life. Cross subsidisation (i.e. the use of profit generating activities to fully or partially subsidise non-profit making activities) is done away with. Here in Durban, we are told that the Natal Technikon may follow the University of Durban-Westville in closing its music department on the grounds that "the department is not profitable." The same logic is being used to deny Chatsworth a match in the Cricket World Cup. And this logic turned into pure barbarism when the Durban Metro decided to turn off the water to the city's poorest schools at the height of a cholera outbreak.

The view that free markets inevitably lead to prosperity is equally problematic. The only time that free markets have been tried before was, briefly, in the England that Dickens indicted. America certainly didn't industrialise by deregulating its market and forcing its industries to stand or fall unprotected. But this was demanded, in the name of freedom, of Africa, Asia, Eastern Europe and South America. And, from Tanzania to New Zealand, shifting power away from governments and towards the market resulted in the impoverishment of the poor, chronic insecurity for the middle class, many of who found themselves working on contract or facing retrenchment, and massive wealth for a super rich elite. So, for example, Disney's Michael Eisner, can award himself a $400 million paycheque while his Haitian workers are so poor that they have to feed their babies on sugar water. Closer to home Saki Macozoma paid Coleman Andrews R200 million Rand for his 30 months at SAA during which Andrews pushed up short terms profits by selling off the company's assets.

The forced imposition of free market fundamentalism has caused enormous suffering in the dominated countries. Spending on infrastructure, health and education has declined and whole industries have been decimated. In South Africa we have lost a million jobs since 1994. We've denied our people life-saving medication. The statistical record of all this suffering is as easy to find as broken lives at the robots. We've endured the pain and never seen the promised gain. And its not just the dominated countries that are suffering. It worth remembering that America now deals with the poor by keeping 2 million young men in privately owned prisons. Run, of course, for profit by companies that make huge donations to the conservative politicians that win votes by putting as many black men in prison as possible.

For a while it seemed as though no amount of suffering could challenge the almost religious and clearly irrational faith that the market will, one day, reward us for our obedience and the sacrifices that we have offered to it.
But there are now real grounds for hope. Everyday less people accept free market fundamentalism as dogma. Ordinary people in the Namada Valley in India, the Chiapas Mountains in Mexico and the streets of Seattle, Washington, Quebec, Prague, Cancun, Melbourne and Wentworth, Mpumalanga and Chatsworth have ensured that. Leading intellectuals are denouncing market fundamentalism with increasing frequency and passion and perceptions are shifting rapidly. On 23 may 2001 Business Report ran a major article showing that the World Bank and IMF's fanatical commitment to market fundamentalism has completely destroyed the Mozambiquean cashew nut industry. An industry that employed over 11 000 people, before the 'experts' stepped in. In the late 90's people who warned that the policies of the IMF and the World Bank would destroy the industry were written off as radicals and were given very little space in the mainstream media. But in 2001 the once 'radical' critique of the IMF and World Bank'sintervention in Mozambique is just common sense.

George Soros, the billionaire Financier, who probably understands the market better than anyone else recently observed that "South Africa is in the hands of global capital. That's why it can't meet the legitimate aspirations of its people." What's more on 30 April 2001, World Bank President James Wolfensohn had to concede that Cuba has done "a great job" in meeting the basic needs of its people - especially in terms of education and health. He couldn't deny the fact that Cuba, inspite of the US trade embargo, has done better than all other poor countries and many rich countries on the major development indicators. He's not the only person to have noticed.

A quick glance at the programme for the World Economic Forum meeting shows, clearly, that they came to Durban to advance their global imposition of market fundamentalism. What else can be made of themes like "The Free Flow of Capital"; and "Better, Faster, Cheaper: Making Liberalization and Deregulation Work"? Not to mention the US$ 150 000 registration fee or the invitations to top people from the world's most loathed corporations. Like Nike, who still pay their sweatshop workers as little as $US 0.16 an hour; Shell who continue to exploit the people and environment in Ongoniland and Pfizer who have used their patent for fluconazole to price this life savingmedicine out of reach of most HIV+ people in the dominated countries. The global corporate elite, in partnership, with local political elites, arestill, in spite of the increasingly obvious failures of market fundamentalism, striving to subordinate society to the market in everysphere of life in every part of the world.

But we can be glad that the fight for humanity and against marketfundamentalism has now, at last, begun in earnest. It will be a long andhard fight. But now that the fight is on hope is defensible.

Richard Pithouse

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