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Friday, February 29, 2008

Walden Bello - SURPLUS kills

The Filipino analyst and organizer of Focus on the Global South, veteran of the years of Allende and Marcos, discusses the prospects for the World Social Forum after September 11, arguing for the need to link protests against the IMF and WTO to campaigns against US military expansion.

Could you tell us about your education and family background?

I was born in Manila, in 1945. My father was in the movie business in the Philippines, and involved in advertising and entertainment. My mother was a singer and composer—both of them were interested in the arts. My father read widely. The story goes that he was immersed in Thoreau when I was born, and decided to name me Walden; though I have two or three Spanish names as well. My parents were both Spanish-speakers, but they didn’t transmit it to us—English was more or less the first language in our household when I was growing up. I had two other Philippine languages, but just spoken ones, not written. I was taught by Jesuits, from first grade through to college graduation, and my initial radicalization was a reaction against that conservative educational system—the Jesuit schools in the Philippines essentially catered for the children of the elite. I wasn’t from that background, and was instinctively opposed to their strict class bias, in a pre-political way.

This was prior to the development of liberation theology?

There were only a handful of people from the university who took up radical positions in the early part of the Marcos period. For the most part, the Jesuit system has been a fairly efficient producer of ruling-class minds. As in Latin America, a layer of Christians with a national-liberation perspective did emerge from some of the religious orders, especially the relatively newer ones, such as the Redemptorists. But that never predominated among the Jesuits. I knew them all, and very few of them—maybe eight or ten—ever embraced a progressive politics. The Jesuits always had a liberal façade; but in terms of their education and the people they produced, they were really quite conservative.

What did you do after graduation?

Upper-class education in the Philippines led automatically either to a corporate career with the multinationals, or into law and government. I didn’t want to be trapped in either—at least, not so soon. So I went down to Sulu and taught in a college in Jolo for about a year. There I got involved in discussions with Muslim intellectuals—people who would go on to form the Mindanao National Liberation Front, in which a number of my students later became active too. I was in sympathy with their analysis of a systematic discrimination against Muslims in the Philippines, although I might not have supported outright secession.

After that I worked for a few years as publications director of the Institute of Philippine Culture, which had been set up by anthropologists from the University of Chicago. Their approach was highly empirical but their ideas about Filipino social structure and behavioural patterns still had a lot of influence. They were closely linked to the US Agency for International Development. At that time, a huge proportion of American funding for social-science research came from the military. People would go to the Philippines—to places like the IPC—on US naval-research grants. This was in the second half of the sixties, at the height of the war against Vietnam—but the social scientists there still claimed their research had no military application. It was a highly politicizing moment for me, in understanding how the system worked: that there was no distinction at all between this sort of funding and academic research.

Was this the time of Marcos’s re-election?

I left for post-graduate studies at Princeton just before the elections in 69—it was a vicious campaign. These were momentous times. In 1970 there was the so-called First Quarter Storm in the Philippines, with the rise of the student movement. But it was the American student struggle against the war in Vietnam that really politicized me, in the United States itself. My next important experience was going down to Chile for my doctoral research in 1972. I was attracted by Allende’s constitutional road to socialism, and wanted to study political mobilization in the shanty towns. I spent a couple of months working with Communists organizing in the local communities, but as soon as I arrived I realized that the correlation of forces had already shifted: it was now the counter-revolution that was in the ascendant. So I ended up re-focusing both my academic work and political interests on the emergence of the reaction in Chile. Coming from the Third World, this wasn’t easy to do. If you weren’t Chilean, and were brown-skinned, you tended to be marked down as a Cuban agent. That got me into trouble a number of times.

The dissertation developed into a comparative study of counter-revolution in Germany, Italy and Chile. It acknowledged the role of the CIA, but put equal, if not greater, weight on domestic class forces in explaining the consolidation of the anti-Allende bloc. The experience gave me a healthy scepticism—running clean against much standard American political science on developing countries—about the democratic role of the middle class. I could see that this was a very ambivalent layer.

By the time I got back to the US to defend my thesis in early 73, Marcos had declared martial law, and the Filipino community in the States was in uproar. It was then that I first became active in exile Filipino politics. Various groups were forming. There was a Movement for a Free Philippines, associated with Senator Raúl Manglapus, one of the stalwarts of the elite opposition to Marcos who had fled to the US straight after the declaration of martial law. A number of Americans, some of them specialists in the area, set up a group called the Friends of the Filipino People; among them was Daniel Schirmer from Boston, who had just written Republic or Empire. I gravitated towards the Union of Democratic Filipinos—the Katipunan ng Demokratikong Pilipino (KDP)—which was allied to the Communist Party of the Philippines and the New People’s Army.

Given the direct relationship between the US and the martial-law regime, which you analysed at the time in Logistics of Repression, [1] how far did the broad Left in the Philippines see its fight as a national liberation movement, rather than simply opposition to military rule?

Marcos, of course, claimed that the rising revolutionary movement was his central reason for declaring martial law, saying it demanded a tough centralized response. His other pretext was what he called the ‘democratic stalemate’—a stand-off between the traditional elite and the Left, which he maintained hampered development. The Communist Party of the Philippines had been refounded in 1968—the ‘old’ CP was regarded as hopelessly compromised and pro-Soviet—and in March 1969 formed the New People’s Army, based essentially in central and northeastern Luzon. Its strategy was classically Maoist: create liberated areas in the countryside, treating the towns as a secondary front, mainly important for recruiting people to the NPA. So when Marcos imposed martial law, there was already a very active, revived Philippine Left.

Could you go back to the Philippines after 72?

No—when I tried to renew my passport in 74 or 75, it was confiscated without explanation. So I was effectively stateless for the next several years. The KDP was now the central focus of my life. I taught at the City College in San Francisco, the State University of New York, and at Berkeley for about four years— not in order to pursue an academic career, but to survive. I joined the CPP and ended up wherever they sent me: New York, San Francisco, Washington. But I was also developing an area of analysis and writing that didn’t automatically reflect the party’s priorities, but that I felt was important for understanding what was really going on. Most of the Left weren’t very interested in the World Bank at the time, but I had a sense that, for a variety of strategic reasons, it was absolutely critical. One of the biggest development projects in the Philippines was a nuclear-power plant; that got me interested in energy issues more generally. In 1979 Peter Hayes, an Australian, Lyuba Zarskey and I set up the Nautilus Institute, to research the intersections between energy and politics. It still exists today, but I was mainly associated with it in the eighties, when we produced documentation on the nuclear plant in the Philippines, and then went on to look at US deployments and military structure in the Pacific. [2]

It was when we were researching the question of US bilateral aid to Marcos that we realized how much of it was being channelled through the World Bank. The role of multilateral institutions—and the Bank in particular—in the Philippines dwarfed direct American support. That’s where my own interest began. I had no formal background in economics; it was all on-the-job training. Figuring out the contours of this comprehensive development strategy became a passionate, all-consuming task, that eventually led to a book, Development Debacle. I began to realize that the process had a dynamic of its own, powered by a very specific ideology.

In the Philippines, the years from 1980 to 1986 were marked by a combination of economic crisis and dwindling regime legitimacy. The South was badly hit by the world recession of 82. Marcos lost a lot of his local power-base, and became increasingly reliant on the multilaterals and US support. At the turn of the decade the World Bank forced Marcos to appoint a cabinet of technocrats to protect its more open-market model of export-oriented production from the depredations of his cronies. Before 83, the Americans’ great fear had been that the opposition to Marcos might fall under the sway of the NPA, since the oligarchic alternative was weak and fragmented—its main leader, Benigno Aquino, was out of the country—and the Left appeared to be largely hegemonic in the resistance to martial law. That changed in 1983, when Aquino returned and was assassinated. His martyrdom revived middle-class and elite opposition, which was gradually able to win the initiative away from the Left.

From then on, Marcos became a thorn in the side of the United States. He didn’t want to open up the system, and wouldn’t agree to the various suggestions from Washington that he should incorporate the illegal opposition into substantive political roles. The tensions between the two came to a head in early 1986, when the US pushed Marcos into holding elections, and he stole them. The result was to trigger middle-class and elite civil resistance, and an uprising with military backing took place. In Washington functionaries like Michael Armacost, the State Department official responsible for the area, took alarm when Marcos prepared to bombard the rebels, and the US stepped in. Marcos was flown out to Hawaii, and Corazon Aquino was installed in power, to popular acclaim. In effect, oligarchic democracy was restored in the Philippines. The CPP, which had boycotted the elections of 1986, arguing they were just a façade to let Marcos to stay in power, was a bystander as these events unfolded. This was one of the reasons for the eventual marginalization of the Left from the mainstream of political life in the country.

What did you do after the fall of Marcos?

When I went back to Manila, I joined the faculty at the University of the Philippines. By then I was more interested in working on broader issues—the role of multilaterals, the Asian development model, the newly industrializing countries—than in specifically national concerns. From the late eighties I was involved with a number of organizations—the Philippine Resource Centre, Food First, Oxfam and Greenpeace—in a personal capacity, rather than in connexion with the CPP. It was not that I was disillusioned at a general level, but I felt that the Left in the archipelago was out of touch with both local and world realities. The purge of the New People’s Army in the mid-eighties, when it executed many of its own militants in a panic over infiltration by spies from the military—I wrote about this—made me question a number of the movement’s philosophical assumptions, about class and the individual. [3] Its miscalculation over the elections of 1986 also had a big impact on me.

Was it at this stage that you founded Focus on the Global South?

We wanted to establish an institute that would look at Asian economic, political and ecological issues, linking them into the broader picture. We based it in Bangkok, partly for reasons of cost, and partly because of conditions for research and analysis there not to be found elsewhere in Asia. Also, Philippine NGOs have a way, naturally enough, of absorbing people into local issues, while we wanted to concentrate on regional and global work. Examining World Bank development models and other patterns of domination had made me increasingly aware that these couldn’t simply be challenged at the national level. Whether it was a question of opposing the US military, or the World Bank or IMF or multinational corporations, it was crucial to begin creating cross-regional links. When the movement in the Philippines succeeded—helped by various contingent factors—in getting the American bases shut down in the early nineties, a number of us warned that, unless we changed the military equation in the region, the victory would not last very long. It didn’t change, and today US troops are back in the Philippines with a vengeance. National movements, important as they are, have to combine with the creation of regional and global movements. Traditional paradigms of international solidarity are no longer appropriate in the current situation.

Who else did you draw into Focus on the Global South?

Kamal Malhotra, from India, was my co-director. The people who helped set us up in Bangkok were Thai scholars, like Suthy Prasartsert, who made a very important intellectual contribution. We were also in touch with the Korean movement, and people like Muto Ichiyo in Japan. Quite a few of these have come onto the board of Focus, which we’ve tried to make as diverse as possible. So far as the name goes, although we started from Asian and Pacific issues, our horizons were always the global patterns of domination and resistance.

On the question of terminology: do you see problems in defining, or reclaiming, words like ‘South’ and ‘North’ or ‘development’ and ‘globalization’, which international institutions often deploy in a mystifying way?

I hope Focus hasn’t contributed to this. We have always been sceptical about the word ‘development’: capitalist development would be a clearer phrase, and we usually speak of ‘corporate-driven globalization’, tying it to the dynamics of world capitalism. I resisted using ‘globalization’ at all at first; people were tossing it about in such a rhetorical fashion that it obscured the real class forces involved. In fact, all these terms tend to be used much too loosely. I was appalled when Oxfam branded some of its allies as ‘globaphobes’, distorting everything they were fighting for. So far as ‘North’ and ‘South’ are concerned, a distinction between the super-industrialized, advanced countries and the rest of the world—or between the centre of the global capitalist economy and its periphery—is clearly valid. At the same time, unequal relations of the North–South type are reproduced within the North itself, while there are Third World elites in the South whose economic interests and lifestyles are closely integrated with the North. So we’ve tried to inflect these terms in a more nuanced way.

Could you describe the activities of Focus?

Our work has been dictated by the priorities of the global struggle. Trade is a major axis. International trade relations, and organizations like the WTO, have become so central to the structuring of the global economy that they demand special attention. ‘Security issues’ are a second axis—that is, tracking the emergent patterns of US military and political hegemony, especially in the Asia–Pacific region, and helping to build resistance. We also look at the ways in which local elites—globally, as well as more specifically in South and East Asia—become integrated into the strategic system. A third area is civil society. We examine the different facets of the popular organizations it harbours, their tremendous potential contribution to democratization, but also their strong tendency to be co-opted and to impose their own agenda on broader movements. Finally, we look at the role of ideologies. Many of the ultra-simplistic conceptualizations of Islam broadcast by CNN and the like are being naively reproduced by people in the South. We wanted to adopt a more critical perspective on the various aspects of Islamic revivalism. Bearing in mind its many retrograde elements, we still need to ask: why has it been in the forefront of the struggle against the United States? But Muslim ‘fundamentalism’ is not the only sort we discuss—we look at Hindu and Christian versions too. Still, the two key institutions to which we always come back are the WTO and the Pentagon. One of our criticisms of the movement against corporate globalization is its tendency to de-link the economic logic of the multinationals and WTO from American military dominance. We need to understand how the two connect—which also means trying to bring together two different movements.

In concrete terms, much of our research and analysis comes out in Focus publications. Take a look at our website——and you’ll see the range of what we do. We organize conferences, particularly on financial, trade and military issues. We work to bring together the global movements—in particular, the peace movements and the anti-corporate globalization campaigns. We are also involved in what bureaucrats call a ‘capacity-building’ role. The Vietnamese government got in touch with us to discuss whether or not they should join the WTO. We gave them a great deal of technical information about the Organization that demonstrated how and why it would be a disaster if they did. One of our jobs is to keep grass-roots communities and national organizations, including some governments, informed about the workings of global institutions. In the process, we get to hear about a lot of interesting initiatives from the grass roots. For instance, there have been efforts in Thailand to bypass the national currency system; people have set up their own common currencies in some of the regions. In Argentina and Chile too, they are improvising barter systems giving local people more control over trade. There’s a two-way process of learning in this sort of work.

How are you funded?

We have more than twenty funders, including European NGOs like NOVIB, Oxfam, Inter Pares and Development and Peace in Canada. We also get some money from the Ford Foundation and other outfits on a project-by-project basis. We have several principles about this. Firstly, we diversify our funding—no more than 20 per cent should come from any one source, to guarantee our independence, and to make sure we don’t tie our financial survival to just one or two funders. Secondly, we need to make sure that there are no strings attached. Thirdly, no funding from the US state. Fourthly, with other governments and institutions, our board always considers proposals on a case-by-case basis. So far, it’s worked quite well. For instance, although we receive a lot of funding from Oxfam, and respect many aspects of their work, our 20-per-cent and no-strings-attached rules have allowed us to be very open in our criticisms of their market-access campaign and recent Trade Report, which argues that it is the access of Southern countries to Northern markets which is the critical problem of the global trade regime.

What are your differences here?

We don’t agree that market access is the key issue—to pose it as such effectively supports the paradigm of export-oriented growth, and presupposes a quid pro quo of open Southern markets. Moreover, Oxfam’s campaign actively deflects the movement from far more important problems. The overriding priority right now is to oppose the WTO’s push for a wider mandate. Its current agenda is to consolidate the concessions extracted from the developing countries at Doha in order to make the fifth round in Mexico next year a springboard for broadening the WTO’s scope to include investment, government procurement and competition policy—an expansion whose scale would rival the Uruguay Round. This is what the opponents of neoliberalism should be concentrating on: increasing the domestic pressure on the real areas of conflict within the WTO, exacerbating the differences over steel tariffs and farming subsidies. Its formal requirement for consensus is a weakness we should try to exploit—it means that talks can founder. In that sense, the Economist is right: corporate-driven globalization is reversible.

How would you summarize your own critique of the WTO ?

The WTO is an opaque, unrepresentative and undemocratic, non-transparent organization driven by a free-trade ideology which, wherever its recipes—liberalization, privatization, deregulation—have been applied over the past twenty years to re-engineer Third World economies, has generated only greater poverty and inequality. That’s the first point: implementation of neoliberal dogmas leads to great suffering. Secondly, the WTO is not an independent body but a representative of American state and corporate interests. Its development has been closely linked to the changing needs of the United States, which has moved from supporting a weak GATT to promoting a muscular WTO as a nominally multilateral order with strong enforcement rules. Neither the EU nor Japan were particular partisans of the WTO when it was founded, at the behest of the Clinton administration. The American state is very flexible in how it pursues its ends—it can be multilateral when it wants to, and unilateral at the same time. The Achilles heel of the WTO is its secretive, undemocratic, oligarchic decision-making structure. This is where we should take aim.

What would you propose as a positive alternative to the WTO regime?

What we call for is deglobalization—hopefully, the term won’t contribute to the confusion; I still think it’s a useful one. If you have a centralized institution imposing a one-size-fits-all model across the globe, it eliminates the space for developing countries to determine their economic strategies themselves. The use of trade policy for industrialization is now banned by the WTO. Yet if you look at the experience of the newly industrializing countries—of Latin America in the sixties and the seventies, say—the reason they were able to achieve a modicum of capitalist development was precisely because they had that room for manoeuvre. We believe that the WTO and similar bodies need to be weakened, if not eliminated entirely. Other international institutions, such as UNCTAD—the UN Conference on Trade and Development, which was performing reasonably well until the rug was pulled out from under it by the WTO—should be strengthened, as should regional organizations like MERCOSUR, which has the potential for being an effective, locally directed import-substitution bloc. Regional financial institutions need to be created, too. If the Asian Monetary Fund had existed in 1997 and 98—when it was pushed by all the countries in the region—the course of the Asian financial crisis would have been different. Instead the idea was killed off by Rubin and Summers, as a challenge to the hegemony of the IMF.

In world terms, then, we call for greater decentralization, greater pluralism, more checks and balances. In a less globalized order, grass-roots groups and popular movements would be in a stronger position to determine economic strategies. At the moment, local elites can always say, ‘We have no choice but to follow this course—if we don’t, the IMF or WTO will rule our policy protectionist’. Focus on the Global South is not against trade; well managed, an increase in imports and exports could be a good thing. But in the Third World the pendulum has swung so far in the direction of export-oriented production, that it does need to be corrected back towards the domestic market—the balance between the two has been lost in the drive to internationalize our economies. We can only do that if we structure trade not through WTO open-market rules but by practices that are negotiated among different parties, with varying interests. Deglobalization doesn’t imply an uncritical acceptance of existing regional organizations. Some of them are merely outposts of the globalized economy, common markets controlled by local technocrats and industrial elites. Others could sustain a genuine regional development programme.

What would deglobalization mean for finance?

The deregulated character of global finance has been responsible for much of the instability that has rocked our economies since the late eighties. We definitely need capital controls, both at regional and local level. In different ways, the experiences of Malaysia, Chile and China have all shown their efficacy. What’s required is an Asian monetary mechanism that would not only support countries whose currencies are under attack, but would also begin to furnish a basis for regional control. As to a world monetary authority, I am very sceptical of its viability as way of controlling global finance, since these centralized structures are now so permeable by the existing market powers, especially the big central banks. I don’t think such an institution would provide an effective defence of the interests of Third World countries. I have never believed that access to foreign capital was the strategic factor in development, although it can be a supplementary one. In fact, our local elites—locked as they are into the existing international order—typically have tremendous reserves of capital. The problem is whether governments in the region have the ability to impose capital controls on them. The same goes for tax regimes, which in Southeast Asia are very retrograde. Of course, the wealth of these elites should be subject to proper taxation.

Land reform?

The distribution of land remains a central issue. One reason why export-oriented production could be pushed so successfully by the World Bank in the seventies, and had such strong support from local establishments and technocrats, was that the markets in developing countries were so limited, precisely because of highly unequal asset and income distributions. A focus on exports was seen by the elites as a way out of the trap of shrunken local markets—attaching your industrialization to the big market outside. It was a way to dodge the massive land reform needed to create—in Keynesian terms—the local purchasing power that could drive an indigenous process of industrialization. So agrarian reform is a necessity throughout Asia, as well as Latin America, for both social and economic reasons.

From Seattle onwards it’s been clear that a critical faultline within the movement runs between those, essentially Northern, activists and organizations who group themselves around a combination of environmental and labour-rights issues—the position you’ve described as Green protectionism—and those in the South who see development in a much wider sense as the main priority. It would clearly be an illusion to think that these two perspectives could fit together easily. Yet if the movement is to develop, this tension has somehow to be negotiated and resolved?

The faultline is real, though I would point out that there are large areas of agreement between Northern and Southern movements—a shared critique of multinationals and global capital, a common perception that citizens need to play a stronger role in curbing the rules of the market and of trade. The fact that people from both tendencies can come together in coalitions and work on a range of points is testimony to the strength of these overlapping interests. However, I think the labour question has to be worked out. We were very critical of the way that trade unions in the US—and, to a great extent, in Europe, through the ICFTU—argued that the WTO would be strengthened if it took up tariffs and labour rights. [4] In our view they should not be calling for a more powerful WTO. That’s a very short-sighted response. Beneath the surface rhetoric about human rights in the South, this is essentially a protectionist movement, aimed at safeguarding Northern jobs. Whenever we raise this in a fraternal way, they get very defensive about it. We say, let’s cut out the hypocrisy: of course we should fight for the jobs of workers in the North—but in a way that supports working-class movements everywhere; not so as to protect one section and leave the rest aside. We need to work out long-term strategies to respond to the way that capital is re-stratifying the working class throughout the world—a division in which hundreds of millions of rural workers get the short end of the stick. The dynamics of global capital are creating a vast underclass, with no support from Northern unions. This is where we need to focus our strategy, on a powerful, visionary effort to organize the world working class. So far, the response from the North—especially from the trade unions—has been a very defensive one, hiding behind the mask of human rights. It makes us deeply uneasy when people from our countries, who have been strongly supportive of workers’ rights and have actively opposed ecologically damaging development policies, are cast in these polemics as anti-environmentalist and anti-labour.

Market access is not the central problem, but it is a problem. There is a tendency in the North—though not all Green organizations fall into this—to use environmental standards as a way of banning goods from developing countries, either on the grounds of the product itself or because of the production methods. The result is a form of discrimination. We need to find a more positive solution to this. We’ve called for a global Marshall Plan—one in which environmental groups would actively participate—to upgrade production methods in the South and accelerate the transfer of Green technology. The focus should be on supporting indigenous Green organizations in developing countries and this sort of positive technological transfer, rather than on sanctions. Sanctions are so easy—they appeal to defensive, protectionist interests, which even some progressive organizations in the North have taken up. It’s very unfortunate that the US labour movement has adopted this hypocritical stance, saying that it’s really concerned about people in China, whereas in fact its objectives are quite egoist. If we can get past this sort of pretence and establish a dialogue at the level of principles, on the interests of the global working class as a whole, we’ll be moving forward.

How far do you regard the World Social Forum in Brazil as a representative arena in which these differences can be hammered out?

When the idea of a global forum was first broached, Focus was one of the organizations that immediately gave its full support. What the Brazilians were proposing was a safe space where people in the movement could come together to affirm their solidarity. This was a very important element of the first Social Forum in 2001. There was a strong sense of the need to talk about alternatives, after Seattle. I think there were real efforts to integrate people from Southern movements, both within the organizing structure and on the panels, although this might not have been successful everywhere. Vandana Shiva and others from the South were brought in from the start, not in a paternalistic way but so they could make genuine suggestions about who should be there. It’s true that Le Monde Diplomatique and ATTAC played an important part in bringing it together, and the support of the PT state government was fairly crucial. But while ATTAC and Le Monde Diplomatique were still vital players in the second Forum, they had a much less central role. If anything, it has been the Brazilian NGOs, civil-society groups and the PT that have, not dominated, but been the moving force. One very positive thing they’ve done since the first Social Forum is to create an international committee, where regional-representation questions can be discussed. Most Third World participants are still Latin Americans, though, and there is a need to bring Africans and Asians into the process—which is why the Brazilians themselves have proposed that the next one could be held in India.

It’s true that in many of the panels the main speakers, figures like Noam Chomsky and Immanuel Wallerstein, have come from the North. But I don’t object to that because we have benefited so much from their work. Others like Rigoberta Menchú and Samir Amin also played a central role. We do need more people from the South—this is a developing process. But the real function is to have a space, every year or two, to be able to get together and exchange viewpoints, in a safe atmosphere—not just another protest demonstration. The main focus now should be on developing the battle of ideas at the WSF. It shouldn’t be a love-fest where people with different positions all pretend to agree. We need to get beyond that, to sharpen our ideas about alternatives, not settle for peaceful coexistence.

Would you envisage a time over the next four or five years when the WSF might organize collective actions? So far we’ve seen very big, single protests in particular spots—Seattle, Prague, Washington. But there’s another level beyond that, of synchronized global campaigns on specific issues. Or would that imply too great a degree of centralized coordination?

I don’t think the WSF is structured for that sort of thing. What it has principally tried to do is to bring people together to discuss alternatives and affirm their sense of solidarity, and it would be very difficult to transform it into a fighting organization along the lines of, say, Our World is Not for Sale. It needs to be an all-inclusive forum, where people who might not be able to agree on medium-level strategic factors can nevertheless still come and have a good, clarifying debate. What I would hope is that all these different movements and coalitions feel that it’s inclusive enough to provide a yearly or bi-yearly arena where strategies and tactics can be discussed, not just ideas about alternatives. It’s in the coalitions, a step below the Social Forum, that these actual strategies will be hammered out. The Our World is Not For Sale coalition is now leading an effort to derail the next WTO ministerial. Fifty Years is Enough, which has also played a key role in the WSF, is organizing against the IMF and the World Bank. The campaign around sweatshops and Nike is very dynamic—it could emerge as the principal anti-corporate network. The anti-war movement is being reborn. It’s these coalitions, rather than the WSF, that could be the axis of a brains-trust on global strategies.

You speak of the World Social Forum being all-inclusive, but doesn’t this run the risk that it might share the fate of the Non-Aligned Movement, where the noble original objectives of the Bandung conference eventually degenerated to the point where you had Suharto and his ilk hob-nobbing with leaders who were genuinely trying to better the world, making it a meaningless spectacle? The worst of these butchers always turned up, seizing the opportunity to burnish their Third World credentials. Mutatis mutandi, this last Social Forum was decorated by all kinds of Centre-Left politicians from Italy, France and elsewhere, who’d been ardently cheering on the war against terrorism, the attack on Afghanistan.

Yes, I would fully agree that this is a danger. A number of the people who showed up at Porto Alegre were there just to polish up their progressive credentials, even while playing a pernicious role at home. At the same time, I think the Forum will become more discriminating about whom it invites. With those who simply turn up, it’s more difficult. But quite a few of those politicians were not asked to speak. Some World Bank officials came and demanded a platform, and were told, ‘No. You can speak elsewhere in the world but this is not your space.’ Then their spokesman went out and told the Economist, ‘I was banned, this is a denial of free speech’. So, of course, the Economist took it up.

There is another challenge: how to remain independent of the established political parties. At present, the Forum’s centre of gravity continues to lie in the social movements—despite the leading role of the PT, it hasn’t attempted to bring in like-minded political parties. But now there is a danger that the old Centre-Left and socialist parties are looking at the WSF and wondering how they can harvest such a rich crop of grass-roots organizations. In a number of places, we’re seeing efforts to establish social forums with political groups of a more traditional sort in charge.

What has been the effect of September 11th on the movement as a whole? The business press has triumphantly declared it a death-blow to the anti-globalization campaign, since it showed that anti-capitalist demagogy always leads to violent protests in the streets, which lead straight to terrorism; now 9.11 has fortunately had a sobering effect. Many activists were indeed very disorientated or dispirited, partly by the way in which the war on terrorism captured the broad attention, but also by the fact that the movement itself was not well-equipped to respond to it. You alluded earlier to the disconnection between the campaign against corporate-driven globalization, which targets multinationals as the enemy, and the pattern of military deployments and structures of the US state, felt by some to be a divisive issue that is best kept off the movement’s agenda. So perhaps it didn’t have the resources for an immediate response, when confronted with this reality. How serious a set-back has all this been?

The initial impact of 9.11 was extremely disorientating, especially when the World Bank and IMF cancelled their meeting that month in Washington, which they were delighted to do. Thanks to Al Qaeda, they then managed to override both grass-roots protests and the qualms of developing countries and ram through the WTO’s declaration at Doha—when previously, there had been a fifty-fifty chance that we could have stopped it. There is no denying this was a defeat. At the same time, there have been some countervailing developments. Firstly, Enron erupted; one should not underestimate the delegitimizing role that played, in taking the wind out of the triumphalism and the ideological push that followed 9.11. Secondly, there’s been the ongoing crisis in Argentina, a social and economic catastrophe brought about by neoliberalism. Both have reignited a widespread scepticism about the corporate-globalization project. Thirdly, there has been the United States’ own performance. The Pentagon still hasn’t managed to get bin Laden, and is now becoming over-extended in areas from which it will be difficult for the US to extricate itself. Going into Iraq will create even greater problems.

Given the tensions in South Asia and the conflict in the Middle East, it’s arguable that the strategic situation of the United Sates is probably worse now than it was prior to September 11, precisely because of this over-extension. The American response has served to strengthen Islamic-fundamentalist tendencies rather than reduce them. Mahathir and Musharraf are bending over backwards for the United States, but a big gulf is emerging between these leaders and their populations. Finally, I think there has been an evolution in the role of many of the anti-corporate globalization groups, who are now beginning to confront issues of warfare and militarism. In the recent conflict in Palestine we had quite a number of people trying to break through Israeli lines.

There were 50,000 people at the World Social Forum this year, as opposed to 15,000 in January 2001. At the EU summit this March in Barcelona, there were 300,000 protesters—much bigger than Genoa. There’s a lot of work to be done before we get back to the situation we were in prior to September, but there are several indications that the movement is on its way back to a fighting stance. One example of this is that, when the US sent troops to the Philippines in January, we put out an appeal for people to participate in an international peace mission, and got so many volunteers that we were able to mount a full-scale investigation: to go to Basilan, study the situation, talk to people—including the Americans—and come back with a critical report that was lambasted by the Philippines government, and became an issue in the archipelago’s politics. This was an instance of people who had simply been concerned with trade questions moving towards broader security-related issues. The Euro-parliamentarian, Matti Wuori, who went to Basilan is a former head of Greenpeace; these are the sort of links and transformations that are being made.

You often allude to class politics, not all that common in the anti-globalization movement. Where do you see your intellectual tradition today coming from?

I would say I’ve been a pragmatist, working with whatever seemed useful to the task in hand. That obviously includes the theoretical arsenal of Marxism. But I wouldn’t call myself a Leninist any longer, because I think the crisis that hit the Communist societies was related to the elitist character of Leninist vanguard organizations. One can understand the historical reasons why they emerged, in repressive situations, but when they become permanent and develop theoretical justifications for their lack of internal democracy, they can become a really negative force. I have been attracted to aspects of the new movement—its decentralized form, its strong anti-bureaucratic impulses and its working through of the ideas of direct democracy, in the spirit of Rousseau—whether one labels that anarchism or not. Still, at this stage I think the movement’s most valuable contribution is its critique of corporate-driven globalization, rather than the model it offers for coming together and making decisions. But there is a global crisis of representative democracy throughout the West today, as well as in countries like the Philippines. The movement does represent an alternative to this. Can direct democracy work? It did in Seattle and Genoa; so we should ask how we can develop it further. How might we—I hate to use the word—institutionalize methods of direct democratic rule?

Walden Bello is one of the leading critics of the current model of economic globalisation, combining the roles of intellectual and activist. As a human rights and peace campaigner, academic, environmentalist and journalist, and through a combination of courage as a dissident, with an extraordinary breadth of published output and personal charisma, he has made a major contribution to the international case against corporate-driven globalisation.

Bello was born in Manila in the Philippines in 1945. He was studying in Princeton for a sociology Ph.D. in 1972 when Ferdinand Marcos took power, and plunged into political activism, collecting his Ph.D, but not returning to the university for another 20 years. Over the next two decades, he became a key figure in the international movement to restore democracy in the Philippines, co-ordinating the Anti-Martial Law Coalition and establishing the Philippines Human Rights Lobby in Washington.

He was arrested repeatedly and finally jailed by the US authorities in 1978 for leading the non-violent takeover of the Philippine consulate in San Francisco. He was released a week later after a hunger strike to publicise human rights abuses in his home country.

While campaigning on human rights he saw how the World Bank and IMF loans and grants were supporting the Marcos regime in power. To expose their role, he took the risk of breaking into the World Bank headquarters in Washington, and brought out 3,000 pages of confidential documents. These provided the material for his book Development Debacle (1982), which became an underground bestseller in the Philippines and contributed to expanding the citizen's movement that eventually deposed Marcos in 1986.

After the fall of Marcos, Bello joined the NGO Food First in the USA, and began to expand his coverage of the Bretton Woods institutions, in particular studying the 'newly industrialised countries' of Asia. His critique of the Asian economic 'miracle', Dragons in Distress, was written six years before the financial collapse that swept through the region.

His recent work has been criticising the financial subjugation of developing countries and promoting alternative models of development that would make countries less dependent on foreign capital.

In 1995, he was co-founder of Focus on the Global South, of which he is now executive director. Focus seeks to build grassroots capacity to tackle wider regional issues of development and capital flows. When the Asian Financial Crisis struck two years later, Focus played a major role advocating a different way forward.

Bello argues that "what developing countries and international civil society should aim at is not to reform the WTO but, through a combination of passive and active measures, to radically reduce its power and make it simply another international institution co-existing with and being checked by other international organisations, agreements and regional groupings. It is in such a more fluid, less structured, more pluralistic world with multiple checks and balances that the nations and communities of the South will be able to carve out the space to develop based on their values, their rhythms, and the strategies of their choice."

At the abortive WTO meeting in Seattle in 1999, Bello played a leading role in the teach-ins around the protest events and was later beaten up by the Seattle police. He was detained again by the Italian police and nearly run over by a police car at the 2001 G-8 summit in Genoa. He also played a key role in civil society circles in elaborating the strategy to derail the WTO Ministerial in Cancun in September 2003.

He has also played a leading role as an environmentalist, and is former chairman of the board of Greenpeace Southeast Asia. His 1998 book A Siamese Tragedy, documenting the environmental destruction of Thailand, became a bestseller there and won praise from former Thai Prime Minister Anand Oanyarachun. It received the Chancellor's Award for best book from the University of the Philippines in 2000.

Bello has campaigned for years for the withdrawal of US military bases in the Philippines, Okinawa and Korea, and has helped set up several regional coalitions dedicated to denuclearisation and demilitarisation, and a new kind of security plan based on meeting people's needs.

After September 11 2001, he was a leading voice from the South urging the USA not to resort to military intervention - which he believed would exacerbate the problem - but to tackle the root causes of terrorism in poverty, inequality, injustice and oppression. In March 2002, he led the peace mission to the southern Philippine island of Basilan, where the US army recently sent their special forces. He was also one of the leaders of a peace mission of Asian parliamentarians and civil society activists that visited Baghdad in March 2003 in a last-ditch effort to stop the US invasion of Iraq.

Bello's current and immediate past roles include:

National Chair Emeritus and National Chair of the party Akbayan, one of the fastest growing parties in the Philippines, which has two members in the National Assembly.
Professor of sociology and public administration at the University of the Philippines.
Executive director of Focus on the Global South.
Member and former Chair of the board of Greenpeace South East Asia.
Visiting Professor in Southeast Asian Studies at the University of California at Los Angeles.
Board member of Food First, the International Forum on Globalisation, and the Transnational Institute.

Bello has won praise for his writing, as the author or editor of 11 books on Asian issues and a range of articles, notably American Lake: The nuclear peril in the Pacific (1984) (co-authored with Peter Hayes and Lyuba Zarsky), People and Power in the Pacific (1992), Dark Victory: The United States and Global Poverty (1999), Global Finance: Thinking on regulating speculative capital markets (2000) and The Future in the Balance: Essays on globalisation and resistance (2001). He won the New California Media Award for Best International Reporting in 1998. The Belgian newspaper Le Soir recently called Bello "the most respected anti-globalisation thinker in Asia".

"Globalization has not only lost its promise but is embittering many. The forces representing human solidarity and community have no choice but to step in quickly to convince the disenchanted masses that, as the banner of the World Social Forum in Porto Alegre proclaims, 'Another world is possible!'" Walden Bello


Chain Gang Economics


"The world is investing too little," according to one prominent economist. "The current situation has its roots in a series of crises over the last decade that were caused by excessive investment, such as the Japanese asset bubble, the crises in Emerging Asia and Latin America, and most recently, the IT bubble. Investment has fallen off sharply since, with only very cautious recovery."

These are not the words of a Marxist economist describing the crisis of overproduction but those of Raghuram Rajan, the new chief economist of the International Monetary Fund (IMF). His analysis, now over a year old, continues to be accurate. Global overcapacity has made further investment simply unprofitable, which significantly dampens global economic growth. In Europe, for instance, GDP growth has averaged only 1.45% in the last few years. Global demand has not kept up with global productive capacity. And if countries are not investing in their economic futures, then growth will continue to stagnate and possibly lead to a global recession.

China and the United States, however, appear to be bucking the trend. But rather than signs of health, growth in these two economies-and their ever more symbiotic relationship with each other-may actually be indicators of crisis. The centrality of the United States to both global growth and global crisis is well known. What is new is China's critical role. Once regarded as the greatest achievement of this era of globalization, China's integration into the global economy is, according to an excellent analysis by political economist Ho-Fung Hung, emerging as a central cause of global capitalism's crisis of overproduction.1

China and the Crisis of Overproduction

China's 8-10% annual growth rate has probably been the principal stimulus of growth in the world economy in the last decade. Chinese imports, for instance, helped to end Japan's decade-long stagnation in 2003. To satisfy China's thirst for capital and technology-intensive goods, Japanese exports shot up by a record 44%, or $60 billion. Indeed, China became the main destination for Asia's exports, accounting for 31% while Japan's share dropped from 20% to 10%. China is now the overwhelming driver of export growth in Taiwan and the Philippines, and the majority buyer of products from Japan, South Korea, Malaysia, and Australia.

At the same time, China became a central contributor to the crisis of global overcapacity. Even as investment declined sharply in many economies in response to the surfeit of productive capacity, particularly in Japan and other East Asian economies, it increased at a breakneck pace in China. Investment in China was not just the obverse of disinvestment elsewhere, although the shutting down of facilities and sloughing off of labor was significant not only in Japan and the United States but in the countries on China's periphery like the Philippines, Thailand, and Malaysia. China was significantly beefing up its industrial capacity and not simply absorbing capacity eliminated elsewhere. At the same time, the ability of the Chinese market to absorb its own industrial output was limited.

Agents of Overinvestment

A major actor in overinvestment was transnational capital. In the late 1980s and 90s, transnational corporations (TNCs) saw China as the last frontier, the unlimited market that could endlessly absorb investment and endlessly throw off profitable returns. However, China's restrictive rules on trade and investment forced TNCs to locate most of their production processes in the country instead of outsourcing only selected numbers of them. Analysts termed such TNC production activities "excessive internalization." By playing according to China's rules, TNCs ended up overinvesting in the country and building up a manufacturing base that produced more than China or even the rest of the world could consume.

By the turn of the millennium, the dream of exploiting a limitless market had vanished. Foreign companies headed for China not so much to sell to millions of newly prosperous Chinese customers but rather to make China a manufacturing base for global markets and take advantage of its inexhaustible supply of cheap labor. Typical of companies that found themselves in this quandary was Philips, the Dutch electronics manufacturer. Philips operates 23 factories in China and produces about $5 billion worth of goods, but two-thirds of their production is exported to other countries.

The other set of actors promoting overcapacity were local governments investing in and building up key industries. While these efforts are often "well planned and executed at the local level," notes Ho-Fung Hung, "the totality of these efforts combined entail anarchic competition among localities, resulting in uncoordinated construction of redundant production capacity and infrastructure."

As a result, idle capacity in such key sectors as steel, automobile, cement, aluminum, and real estate has been soaring since the mid-1990s, with estimates that over 75% of China's industries are currently plagued by overcapacity and that fixed asset investments in industries already experiencing overinvestment account for 40-50% of China's GDP growth in 2005. China's State Development and Reform Commission projects that the automobile industry will produce double what the market can absorb by 2010. The impact on profitability is not to be underestimated if we are to believe government statistics: at the end of 2005, Hung points out, the average annual profit growth rate of all major enterprises had plunged by half and the total deficit of losing enterprises had increased sharply by 57.6%.

The Low-Wage Strategy

The Chinese government can mitigate excess capacity by expanding people's purchasing power via a policy of income and asset redistribution. Doing so would probably mean slower growth but more domestic and global stability. This is what China's so-called New Left intellectuals and policy analysts have been advising. China's authorities, however, have apparently chosen to continue the old strategy of dominating world markets by exploiting the country's cheap labor. Although China's population is 1.3 billion, 700 million people-or over half-live in the countryside and earn an average of just $285 a year, according to some estimates. This reserve army of rural poor has enabled manufacturers, both foreign and local, to keep wages down.

Aside from the potentially destabilizing political effects of regressive income distribution, this low-wage strategy, as Hung points out, "impedes the growth of consumption relative to the phenomenal economic expansion and great leap of investment." In other words, the global crisis of overproduction will worsen as China continues to dump its industrial production on global markets constrained by slow growth.

Vicious Cycle

Chinese production and American consumption are like the proverbial prisoners who seek to break free from one another but can't because they're chained together. This relationship is increasingly taking the form of a vicious cycle. On the one hand, China's breakneck growth has increasingly depended on the ability of American consumers to continue their consumption of much of the output of China's production brought about by excessive investment. On the other hand, America's high consumption rate depends on Beijing's lending the U.S. private and public sectors a significant portion of the trillion-plus dollars it has accumulated over the last decade from its yawning trade surplus with Washington.

This chain-gang relationship, says the IMF's Rajan, is "unsustainable." Both the United States and the IMF have decried what they call "global macroeconomic imbalances" and called on China to revalue the renminbi to reduce its trade surplus with the United States. Yet China can't really abandon its cheap currency policy. Along with cheap labor, cheap currency is part of China's successful formula of export-oriented production. And the United States really can't afford to be too tough on China since it depends on that open line of credit to Beijing to continue feeding the middle-class spending that sustains its own economic growth.

The IMF ascribes this state of affairs to "macroeconomic imbalances." But it's really a crisis of overproduction. Thanks to Chinese factories and American consumers, the crisis is likely to get worse.

Walden Bello is executive director of Focus on the Global South and professor of sociology at the University of the Philippines. This article is based on work done for the Nautilus Institute's China Project.

End Notes

1. Ho-Fung Hung, "Rise of China and the Global Overaccumulation Crisis," paper presented at the Global Division of the Annual Meeting of the Society for the Study of Social Problems," August 10-12, 2005, Montreal, Canada. A revised version of this paper will soon be published in a leading international relations journal

Thursday, February 21, 2008


Instal08, The Arches, Glasgow NEIL COOPER -- February 19 2008

The last time a major counter-cultural figure came to Glasgow was when
Noam Chomsky spoke at the Self-Determination and Power Event in 1990. So
to have Gustav Metzger, the founding father of auto-destructive art, as
the figurehead of this year's three-day festival of left-field music
showed how far Instal is attempting to locate itself from any
old-fashioned notions of a gig.

Metzger was the inspiration behind Self-Cancellation, in which artists,
including harpist Rhodri Davies and sax player John Butcher, explored the
implosive possibilities of sound. With tubas filled with sand and sounds
generated from the building itself, the effect was of an alchemical
cabaret-cum-science class.

There was little science involved in Energy Births Form, Saturday's
three-hour extravaganza in which veteran bassist Alan Silva, sax player
Donald Dietrich, and the cream of Japan's underground players attempted to
blow their minds, as well as the audiences', into a state of transcendent
bliss. It was a good-natured and at times persuasive racket, though Kylie
Minoise's five-minute private shows got there a whole lot quicker.


Lake of Fire (2006)

Cast: Noam Chomsky, Alan Dershowitz, Nat Hentoff,...
Director: Tony Kaye, Tony Kaye
Studio: Velocity / Thinkfilm
Genre: Documentary, Political & Social Issues
Running Time: 152 min.
Languages: English
Subtitles: English

Available on: March 11, 2008


With Lake of Fire, American History X helmer and music video director Tony
Kaye climbs inside of the decades-old abortion debate for a 152-minute
study of the pro-life and pro-choice positions. In the process, he
uncovers not an objective black-and-white issue, but a myriad of
circumstances and sub-issues of tremendous moral complexity and ambiguity.
He then investigates the sub-philosophies and ideas that belie each side,
with generous input and assistance from socialist Noam Chomsky, and via
interviews with Christian theologians, and professors of bioethics,
sociology and philosophy. Kaye also gives substantial consideration to the
violence directed by certain extremists at abortion doctors, nurses, and
clinics. The director worked on the picture for well over fifteen years,
and it serves as a prime candidate for the definitive abortion
documentary. However, be forewarned: Lake of Fire includes lengthy,
graphic depictions of abortion procedures and their physical and emotional
side-effects, and it is not for the squeamish or suitable for younger
audiences. ~ Nathan Southern, All Movie Guide


Fiona Macdonald, Metro 20.02.08

According to Cornelia Parker, her 42min film of philosopher and
linguistics professor Noam Chomsky holding forth on big issues is...

Chomsky compares the US foreign policy of quashing 'successful defiance'
with a Mafia godfather punishing disobedience. He argues that our economic
system is fundamentally flawed.

And he touches on climate change, the reason for Parker's film (the
screening is in partnership with Friends of the Earth and visitors can
leave thoughts on 'poison and antidote' postcards).


Chomskian Abstract, 2007, DVD, 41:48,
Filmed on 9 March 2007 at Massachusetts Institute of Technology, courtesy
the artist.
Co-commissioned by Sharjah Biennial 8 - 2007, UAE and Ikon Gallery,
Birmingham, UK.


Creative Destruction' – The Madness of the Global Economy -Part 1

Watching the corporate media report the 'financial crisis' is instructive.
From the perspective of power, it is important that a steadying hand is
applied to the tiller of news and commentary on the crisis, and the global
economy itself.

And so columnist Martin Wolf took a 'measured' view in the Financial
Times. There have been 100 "significant" banking crises in the past thirty
years, he noted, making them almost routine. Authorities have had to
intervene to "rescue" the US financial system from four crises over that
period: the developing country debt and also the "savings and loan" crises
of the 1980s; the commercial property crisis of the early 1990s; and now
the subprime and credit crisis of 2007-08. As Wolf observed correctly of
the banking sector: "No industry has a comparable talent for privatising
gains and socialising losses."

Wolf's big "fear", though, is that the crumbling financial system will
destroy "the political legitimacy of the market economy itself." Why this
"political legitimacy" should not be challenged is left hanging in the air.

And what Wolf terms the "market economy" is an extreme variant of
capitalism known as 'neoliberalism' which is massively subsidised and
protected by powerful states. Again, all this is left unsaid. Wolf turns
instead to bankers' pay which, he asserts, lies at the root of the problem:

"By paying huge bonuses on the basis of short-term performance [...] banks
create gigantic incentives to disguise risk-taking as value-creation."
Official intervention to regulate bankers' remuneration is a "horrible"
solution. But the alternative, an endless series of financial crises, is
"even worse." (Wolf, 'Why regulators should intervene in bankers' pay',
Financial Times, January 16, 2008)

Wolf's "solution", however, is hugely impractical. Defining a link between
bankers' performance and remuneration would be immensely difficult,
involve unlikely international regulation of global markets and require
complex mechanisms to police. As this simply is not going to happen in the
current political climate, given the certain massive resistance of
financial interests, we can expect similar and maybe worse crises in the

Over at the Times, another useful gauge of establishment thinking, the
title of Anatole Kaletsky's column summed up the required pacifying
message: 'Relax. Our economy isn't manic depressive.' Happily, according
to Kaletsky's "hunch", it will all turn out fine: "a combination of
monetary and fiscal easing, along with some regulatory changes [...] will
lessen the credit crisis and prevent a world recession." (Kaletsky, The
Times, January 24, 2008). The message was buoyant, but it was also

The Independent's economics commentator, Hamish McRae, pinned blame for
the crisis simply on "mistakes":

"Bankers, like the rest of us, make mistakes, but the scale of the
mistakes, particularly in US banks, has been enormous. We won't fully
understand for some time quite how they could persuade themselves that
bundles of housing loans to clearly uncreditworthy borrowers should be
ranked as almost as good as government securities."

The "legitimate question" now, asserts McRae, is "whether the continuing
banking weakness has become so serious as to transfer what is still a
financial market problem into a more general economic problem." His
reassuring conclusion:

"Banking troubles will be a drag on the world economy, slowing it down.
But they won't stop it in its tracks." (McRae, 'The markets are bad, but
don't panic just yet', Independent, January 23, 2008)

This would be comforting news for the 'masters of the universe' who were
meeting in Davos, many of them in sombre mood: 27 heads of state; 113
cabinet ministers; hundreds of chief executives, bankers, fund managers,
economists and journalists: about 2,500 participants in all. Sean O'Grady,
the Independent's economics editor, was enthralled by the "concentrated,
eclectic mix of the top slice of humanity" that "is part of the 'magic' of
this mountain redoubt"; all twinkling under a "sprinkling of stardust"
brought upon proceedings by the likes of Bono.

The stardust was clearly affecting O'Grady's vision as he proposed we
should rely on western political and corporate leaders to "balance the
needs and aspirations of the old economies of the West, the emerging
economies of the east and the still poor billions in the south." (O'Grady,
'Davos. Wealth, power and a sprinkling of stardust', The Independent,
January 22, 2008)

In the Guardian's comment pages there was at least a glimmer of dissent
from columnist Jonathan Freedland. "Turbo-capitalism is not just unfair,"
he wrote, "it is dishonest and dangerous." He pleaded: "surely this is the
moment when Labour and the centre-left can dare to question the neoliberal
dogma that has prevailed since the days of Thatcher."

Freedland's dissection was limited, though, cautiously proposing that "you
could argue" that "capitalism is always [...] parasitical on the state."
What he sought was a kinder, gentler form of capitalism instead of the
"turbo-capitalism" which is happy to rely "on us, the public, and our
instrument, the state, when it gets in trouble." Thin on details, he
concluded weakly: "Now we should demand a say the rest of the time, too."
(Freedland, 'The free-marketeers abhor the crutch of the state - until
they start limping', Guardian, January 23, 2008)

The above sample indicates the narrow spectrum of corporate media opinion
on the 'financial crisis.' Viewpoints are heavily biased towards the
status quo, with only occasional fig leaves of mild dissent. This is a
misleading picture, avoiding scrutiny of an economic system that is both
fundamentally flawed and stacked against the majority of humanity.

Financial and political elites are at pains to convince the public they
+can+ get things 'back on track' by tweaking interest rates, 'stimulating'
the economy and only infrequently having to intervene to make a heroic
"rescue". Thus, although the occasional financial crisis cannot be
prevented - just as a flu virus might afflict a healthy body - the economy
itself is presumed to be "inherently strong." (President George W. Bush,
quoted, Democracy Now!, January 23, 2008;

This is a vital illusion; the required view of wealthy investors and
corporations. After all, a basic requirement for powerful authority to
prevail is the mythical projection of a benign force in control of events.
Western leaders and their faithful retinue in the media are deceptively
reassuring about the global economic situation - because profits and power
demand it. Otherwise they run the serious risk of a huge slump in public
confidence in the current economic system and even in what passes for
'democratic' politics. Corporate reporting of the 'financial crisis',
then, is yet another example of how reality is distorted in service to
power and profit.

Boom And Bust

Despite the huge scale of yet another financial crisis, and the threat of
an impending severe global economic recession, the major political parties
and elite media refuse to address the possibility of fundamental
weaknesses and inequality at the very heart of modern 'capitalism.' In
reality, the current system, driven by private profit far beyond
environmental sanity, is incapable of meeting the needs and aspirations of

The inherently unstable and destructive behaviour of capitalism derives
from its inevitable cycles of "boom and bust." We can see this in both
theory and practice. Corporations operate for the primary benefit of their
shareholders, as demanded by company law. The priority of shareholders is
to maximise profits. The capital that they invest must increase in value
to justify the risk undertaken. Demand for products and services thus
needs to expand. The profits gained, or part thereof, can then be
reinvested to generate further profit.

But the process is unsustainable because markets become saturated as
consumers reach the limit of their demand capacity. Intense competition
impels producers to drive down costs, especially labour, to make a profit.
As profits become squeezed, and dividend-hungry shareholders threaten to
take their investment elsewhere, producers become desperate to push up
total sales. They pump out ever greater volumes of commodities and spend
billions on advertising to boost demand. Inevitably, the flood of
commodities surpasses the capacity of the market to absorb products. Sales
collapse, unemployment rises and a full-blown recession ensues: this is
the 'bust' part of the cycle. Surplus productive capacity then has to be
destroyed before a new 'boom' can begin.

That is the theory, and it is borne out by historical experience. Since
the industrial revolution, around 200 years ago in the West, boom-and-bust
cycles have recurred with varying intensity. The most destructive bust
occurred in the 1930s Great Depression, leading to World War Two and the
deaths of over 60 million people.

Historically, as Karl Marx recognised, capitalism can also be seen as the
driver of technological revolutions and in boosting human powers of
production. And, at least in the West, it has been associated with past
increases in the living conditions of a sizeable fraction of the
population. So perhaps we should accept that capitalism, with all its
flaws, +is+ the best we can do. Perhaps we should believe the official
argument that governments have largely learnt to cope with boom-and-bust
cycles through judicious planning.

For example, a huge crisis +was+ averted in the 1970s. However, this was
only possible because, as British economist Harry Shutt explains: "the
authorities were determined (as never before) to use the forces of the
state - through fiscal and monetary manipulation (including massive but
unsustainable government borrowing) - to try and keep the show on the
road." (Shutt, email, January 28, 2008)

But these were only short-term 'fixes' at best. Gerry Gold and Paul
Feldman sum up:

"Attempts to resolve the simultaneous stagnation and inflation of the
1970s through high interest rates produced a recession in the US in the
early 1980s. Parallel deflationary policies imposed by the UK's Thatcher
government from 1979 led quickly to a recession and a fullblown slump by
1985. Attempts to overcome this only led to a further recession in
1991-2." (Gold and Feldman, 'A House of Cards: From fantasy finance to
global crash', Lupus Books, London, 2007, p. 28)

Moreover, Shutt exposes the "coping strategies" promoted over the past
twenty years by government authorities in cahoots with Wall Street and the
City. These have "all involved pumping up credit bubbles around various
fantasies – 'emerging' markets,, housing - which had about as much
substance as the original South Sea [Bubble] and could only be sustained
even for a few years by a similar level of fraud and misinformation."
(Shutt, email, January 28, 2008)

In 1997, a major financial crisis erupted, starting in East Asia.
Currencies collapsed, businesses went bankrupt and millions of people lost
their jobs. Many Asian enterprises were subsequently snapped up at
rock-bottom prices by corporations and investors in the West. Soon after,
in 2000, the speculative bubble of investment in internet-related
companies burst spectacularly. This 'dot-com' bust saw a lengthy recession
ensue in the developed world.

Historical evidence shows, then, that governments have been largely
powerless to combat capitalism's inevitable and damaging 'business
cycles'. However, this should not be confused with the resiliency of
capitalism; the system has demonstrated a repeated capacity to reform
itself sufficiently to allow renewed growth and to survive further rounds
of business cycles. So it would be wrong to assume that the whole
capitalist system, unstable and unfair as it always will be, is on the
verge of total collapse.

Official Fraud And Propaganda

An alarming symptom of what is wrong with current economics is the
increasingly desperate and cynical measures taken by powerful states,
corporations and investors to maintain faltering public confidence in
global capitalism. Just as Enron, Worldcom and a host of other large
corporations have committed accounting fraud, so governments have
falsified figures on inflation, output and unemployment to present a false
picture of a healthy economy. (See Shutt, 'The Decline of Capitalism', Zed
Books, London, 2005, pp. 104-5)

For example, the US government has deliberately exaggerated GDP growth
rates in order to disguise the economy's poor performance since the
mid-1970s; in the developed world, growth rates have actually declined
over the past three decades. As David Harvey reports, aggregate global
growth rates stood at around 3.5 per cent in the 1960s. Even during the
difficult 1970s, marked by energy shortages and industrial unrest, it fell
only to 2.4 per cent. But the subsequent growth rates have languished at
1.4 per cent and 1.1 per cent in the 1980s and 1990s, respectively, and
has struggled to reach even 1 per cent since 2000. (Harvey, 'A Brief
History of Neoliberalism', Oxford University Press, 2005, p. 154)

In terms of public perception, however, the authorities have largely
succeeded. They have maintained the fiction that they +can+ manage the
economy effectively and that global capitalism is the only game in town.
How has this been possible? Shutt points to a "media campaign of
uncritical propaganda and pro-market hype." This "sustained act of mass
deception (in which the establishment has seemingly come to believe in its
own propaganda) has had disastrous consequences." (Shutt, op. cit., pp.

Those consequences include crushing levels of poverty and inequality; wars
motivated by the desire for strategic control, hydrocarbon resources and
economic markets; climate instability; and the most rapid loss of species
in the planet's history.

The Neoliberal Nightmare

To complement the above picture, and in contrast to corporate media
coverage, we must also critically describe the political-economic process
summed up by that innocuous-sounding word, 'neoliberalisation'. This
serious attack on democracy, the latest stage in advanced capitalism, took
root in the Reagan-Thatcher era of the 1980s, and has accelerated ever
since. Proponents of neoliberalism tell us that human well-being
flourishes best within an institutional framework characterised by strong
private property rights, 'free' markets and 'free' trade. But what has it
meant in practice?

First, recall that after the trauma of the Depression and WW2 in the 1930s
and 1940s, Western governments used Keynesian fiscal and monetary policies
(named after the British economist John Maynard Keynes) to try to dampen
business cycles and to ensure reasonably full employment. There was
significant state-led planning, and even state ownership, of key
industrial sectors such as coal, steel and cars. Governments also made
huge investments in health care, education and infrastructure. As David
Harvey explains, this system of "embedded liberalism" involved "market
processes and entrepreneurial and corporate activities [that] were
surrounded by a web of social and political constraints and a regulatory
environment."(Harvey, op. cit., pp. 10-11)

During the 1950s and 1960s, embedded liberalism delivered high rates of
economic growth in the West. But in the 1970s, given the inevitability of
boom-and-bust, a serious crisis of capital accumulation arose. Inflation
and unemployment soared, and labour unrest threatened business interests.
The free-market and monetarist financial centres, notably the City of
London, had never been enamoured of the postwar welfare state and were
increasingly antagonistic towards state Keynesian policies. As Harvey
notes, "the nationalized industries were draining resources from the
Treasury." (op. cit., p. 57). With the oil shocks and economic stagnation
of the 1970s, powerful business and political forces mobilised to set a
course for the next stage of capitalism: to regain the elite class power
that had been dissipated, to some extent, by postwar policies of wealth
redistribution and social welfare. Neoliberalisation was born.

A wave of deregulation of financial markets swept the world, and
transnational mobility of capital rapidly rose. Corporate pressure
intensified on governments to create a 'good business climate' and to
adopt neoliberal 'reforms' that routinely squeezed state spending. Wall
Street-IMF-Treasury policy measures came to dominate US economic policy
and many developing countries were driven down the neoliberal road,
creating social havoc and environmental disasters. Neoliberalism became
the new economic orthodoxy, exerting a powerful ideological influence in
the media and academia.

The whole process has been a form of 'creative destruction', weakening or
even breaking down existing institutions and state powers, social welfare,
health care, education systems and culture – even modes of human
interaction, behaviour and thought.

In some countries, certainly, there have been 'successes' during the
initial stages of neoliberalisation in lifting people out of poverty and
in raising living standards for many – just as past capitalism generally
did in the West. However, this has certainly not been the motivating
intent of corporations and investors, despite much pious rhetoric about
'solving poverty'. Any localised 'success' has typically been achieved at
the expense of people elsewhere, in regions where neoliberal 'development'
has not been as advanced. China's achievements, for example, have been
gained to the serious detriment of neighbouring economies.

A persistent and deep-rooted characteristic of neoliberalisation has been
its strong tendency to worsen social inequality, as we will see later.
Social progress achieved during neoliberalisation of previously poor
countries has not been sustained. Typically, state intervention has been
required to maintain any semblance of a social welfare safety net – or the
net has simply been left to fray in the chill winds of economic 'progress'.

At the other end of the social spectrum, neoliberalisation has generated
spectacular concentrations of wealth and power that have not been seen
since the 1920s. In China and Russia, new and powerful economic elites
have been created. Harvey sums up:

"The flows of tribute into the world's major financial centres have been
astonishing. What, however, is even more astonishing is the habit of
treating all of this as a mere and in some instances even unfortunate
byproduct of neoliberalization. The very idea that this might be - just
might be - the fundamental core of what neoliberalization has been about
all along appears unthinkable. It has been part of the genius of
neoliberal theory to provide a benevolent mask full of wonderful-sounding
words like freedom, liberty, choice, and rights, to hide the grim
realities of the restoration or reconstitution of naked class power
[...]." (Harvey, op. cit., pp. 118-119)

The above is but a hint of the stark reality underpinning the
'flourishing' of the global economic system; a reality that is shamefully
missing from broadcast headlines and newspaper front pages. The current
system of economics, particularly the latest stage of "turbo-capitalism",
known inoffensively as "neoliberalism", is built upon painful
boom-and-bust cycles fuelled by corporate greed and maintained by cynical
deception of the public. The costs to the planet – in terms of human
suffering and environmental collapse – are staggering.

Exchange With The Independent's Hamish McRae

In Part One of this alert, we noted an observation made by Hamish McRae,
economics columnist at the Independent:

"Bankers, like the rest of us, make mistakes, but the scale of the
mistakes, particularly in US banks, has been enormous." (McRae, 'The
markets are bad, but don't panic just yet', The Independent, January 23,

We asked him why he talked merely of "mistakes", adding:

"Why are the terms of your analysis so narrow; so skewed towards the
perspective of financial power?" (Email, January 23, 2008)

As an alternative, we suggested a few observations made in Part One; in
particular, that the current economic system is both innately unstable and
destructive. We asked McRae why he appears to reject such a rational
analysis. On the same day, he wrote back confusingly:

"Thanks - I see your point. I suppose I feel I should deal with the world
as it is, rather than as it might be. Is that narrow? Well, yes if you are
seeking a discussion of the merits and demerits of the present global
market economy, but no if you are trying to understand and calibrate what
is actually happening. I think I am probably more use doing the latter."

We responded:

"You say: 'I feel I should deal with the world as it is.' Perhaps it would
be more accurate to rephrase this as: 'I feel I should deal with the world
as I see it.'"

His reply, sent as he was about to head for the World Economic Forum in

"Not sure - let me think about it. But in all earnestness I do think that
you should not discount the huge progress made in India and China in
lifting people out of poverty. I visited both in recent months and am in
awe. I shall have to stop this interchange as I have to pack for Davos

But just how accurate is McRae's observation of the "huge progress made in
India and China", a mantra that appears regularly in the corporate media?

India And China: The Latest 'Success Stories' Of Capitalism

Cheerleaders for capitalism are keen to advertise the system's
'successes'. Earlier, model countries were said to include Japan, South
Korea, Malaysia and Thailand. But that was before the East Asian financial
crisis of 1997-98. India and China are today's poster states for

Some progress in these countries is real. However, as we noted before, any
social progress under 'neoliberal reforms' has not been sustained and,
moreover, has been to the detriment of people losing out elsewhere in the
global economy (not to mention the damage to global ecosystems).

Another important factor, glossed over in conventional reporting, is that
massive state intervention and subsidies have been required to ameliorate
the worst consequences of 'shock therapy' in following neoliberal
doctrines of 'market reforms.' Political economist David Kotz notes that
China's strategy of opening up its economy since 1978 "bears almost no
resemblance to the neoliberal approach followed by Russia."

For example, government price controls were lifted only gradually in
China. Also, the large-scale privatisation of state-owned enterprises,
upon which many people depended, did not begin until 1996, 18 years into
the transition. The state continued to direct and support large state
enterprises, only gradually loosening its regulation as experience grew of
operating in a market environment.

Public spending and public investment continued to grow, rather than
shrink as in Russia. China did not privatise its banks, as Russia did, but
retained a state-controlled financial system. And rather than rapidly
eliminating barriers to trade and capital movements, China has retained
significant controls over both. (Kotz, 'The Role of the State in Economic
Transformation: Comparing the Transition Experiences of Russia and China',
Political Economy Research Institute, University of Massachusetts at
Amherst, October 1, 2004;


By keeping strict control of key elements of the economy, China managed
(at least initially) to avoid the disasters that assailed other countries.
India, too, has long pursued interventionist economic strategies, with the
government restricting the attempted access by foreign corporations to
domestic markets and enterprises.

Commentators in the corporate media seem reluctant to acknowledge all this
when they talk of the supposed successes of 'market reforms' in China and
India. Moreover, behind McRae's impression "of huge progress" in these
countries, the reality is far more disturbing.

Take India first. In 2007, the country's rank in the Human Development
Index of the United Nations Development Programme (UNDP) fell two places
to 128. That put India in the bottom 50 of the 177 nations examined. P.
Sainath, rural affairs editor of The Hindu newspaper, points out the
disturbing context of the statistics:

"El Salvador, which saw a bloody civil war for over a decade from the
1980s, ranks 25 places ahead of us at 103. Bolivia, often called South
America's poorest nation, is 11 steps above us at 117. Guatemala, nearly
half of whose citizens are poor indigenous people, saw the longest civil
war in Central America. One that lasted close to four decades and which
saw 200,000 people killed or disappear. That too, in a nation of just 12
million. Guatemala ranks 10 places above us at 118." (Sainath, 'India
2007: High growth, low development', The Hindu, December 24, 2007)

Sainath adds, with grim humour:

"India rose in the dollar billionaire rankings, though. From rank 8 in
2006 to number 4 in the Forbes list this year [...] In the billionaire
stakes, we are ahead of most of the planet and might even close in on two
of the three nations ahead of us (Germany and Russia)."

As India's new billionaires snap up palatial homes and luxury yachts,
desperate conditions for the nation's farmers have led to an epidemic of
suicides. Vandana Shiva, director of the Research Foundation for Science,
Technology and Ecology, refers to the appalling suicides of more than
40,000 Indian farmers since 1997 as "genocide":

"This genocide is a result of deliberate policy imposed by the World Trade
Organisation and implemented by the Government. It is designed to destroy
small farmers and transform Indian agriculture into large-scale corporate
industrial farming."

Farmers are in despair over crippling debts from rising production costs
and falling prices, both linked to the corporate-led imposition of 'free
trade' in agriculture. Shiva warns of the growing forced dependence on
hybrid and genetically modified seeds which are costly and cannot be
saved. These consequences derive from the corporate policy of privatising
seed supply and the drive towards multinational seed monopolies. (Special
correspondent, 'Farmers' suicides nothing but genocide, says Vandana
Shiva', The Hindu, May 9, 2006)

So India's 'success' has come at a huge social price. What about China?

"A Large Statistical Glitch"

A new World Bank study has revealed that China's economy is considerably
smaller than had been thought, perhaps by as much as 40 per cent. "What
happened was a large statistical glitch," reported the New York Times. But
it's a glitch that has huge repercussions:

"Suddenly the number of Chinese who live below the World Bank's poverty
line of a dollar a day jumped from about 100 million to 300 million." That
is the same size as the entire population of the United States. The new
figures mean that the size of India's economy, too, has probably been
exaggerated until now. "And, by the way, global growth has very likely
been slower than we thought." (Eduardo Porter, 'China shrinks', New York
Times, December 9, 2007).

Economist Martin Hart-Landsberg notes that China's alleged success is "at
the expense of economic problems elsewhere":

"[W]hile investment rates are very high in China, they are low and falling
in most of the rest of East Asia. Their economies have become increasingly
dependent on exporting to China and to succeed they have been forced to
keep wages low." (Email, January 26, 2008)

China has largely failed to generate new jobs: an endemic feature of
neoliberalism. Indeed, a 2004 study by Alliance Capital Management
reported that manufacturing jobs are being +eliminated+ faster in China
than in any other country. Between 1995 and 2002, China lost more than 15
million factory jobs: 15 per cent of its total manufacturing workforce.
(Jeremy Rifkin, 'Return of a Conundrum', The Guardian, March 2, 2004)

Even by the World Bank's own analysis, China's poor have been growing
poorer as the country's economy 'booms.' The real income of the poorest 10
per cent of China's 1.3 billion people fell by 2.4 per cent in the two
years to 2003. During this time the economy was growing by nearly 10 per
cent a year. Over the same period, the income of China's richest 10 per
cent rose by more than 16 per cent. (Richard McGregor, 'China's poorest
worse off after boom,' Financial Times, November 21, 2006)

Tragically, studies of China's health indicators show a slowdown or even
reversal of trends. A report in 2005 "concluded that China's rates of
improvement in life expectancy were lower than those of East Asia and the
Pacific region as a whole in every decade other than the 1960s, and fell
below the world average in the 1990s. They observed a similar trend for
infant mortality, noting that China's advances were again outpaced by
those of high income countries and other East Asian and Pacific states."
(Sanjay Reddy, "Death in China, Market Reforms and Health," New Left
Review, 45, May/June 2007, p. 62)

Hart-Landsberg warns that "past health gains from immunizations, water and
sewer infrastructure, education, etc. may now be exhausted. And as
marketization continues, the social infrastructure is being destroyed,
with the consequence that problems are emerging for most Chinese. Social
support/public health care system is not there and health care is now a
market process. Many cannot afford it as they have to pay for access to
it." (Email, January 26, 2008)

On top of this working class misery, inequality between China's rich and
poor is appalling and is actually getting worse. The Asian Development
Bank studied the degree of inequality, using the popular Gini coefficient,
in 22 East Asian developing countries. It found that China had the second
highest degree of inequality, trailing only Nepal (Asian Development Bank,
'Inequality in Asia, Key Indicators 2007, Special Chapter Highlights', p.

China's tragic transformation from one of the most equal, to one of the
least equal, countries is even more striking if we switch our measure of
inequality from the Gini coefficient to income ratios; in particular, the
earnings of the top 20 per cent relative to the bottom 20 per cent of the
population. Using this measure, China had by far the highest growth in
inequality (Ibid., p. 7). Sadly, Hart-Landsberger warns that there is
"every reason to believe that these [official] statistics strongly
underestimate the degree of inequality." (Email, January 26, 2008)

There are further 'hidden' costs to China's rapid growth: rising
pollution, destruction of ecosystems and the heightened threat of climate
chaos. Future generations will bear the brunt of these 'externalities.'
The Worldwatch Institute reported at the end of 2006 that China had slid
down the annual Climate Change Performance Index (CCPI), a measure of a
country's climate protection efforts, due to its rising emissions of
carbon dioxide. China ranked 29th out of 53 countries in 2006, dropping to
54th out of 56 in the 2007 update. (Hua Zhang, 'China's Climate Change
Performance Worsening', Worldwatch Institute, November 23, 2006;

The history of neoliberal 'reforms' suggests things can only get worse.

Concluding Remarks

The dominant system of economics is unstable, inimical to social justice
and lethally damaging to the environmental support systems on which we all
depend. A major failure in professional journalism has been the refusal to
analyse this; or even to report that real growth rates in the developed
world have been declining since the 1970s. Instead, corporate-employed
journalists and mainstream analysts frequently extol the alleged
spectacular achievements of an 'unparalleled' rise in wealth.

We referred in Part One to the desperate attempts by governments to
manipulate official statistics to hype the 'success' of global capitalism.
Do commentators in the media really believe that a civilised society
should tolerate an economic system so dependent on deception to maintain
public 'confidence' in 'free' and 'open' markets?

The media's omission of rational perspectives on the global economy is
particularly galling in the case of the publicly-funded BBC, which
professes a "commitment to impartiality." This "commitment" supposedly
means that "we strive to reflect a wide range of opinion and explore a
range and conflict of views so that no significant strand of thought is
knowingly unreflected or under represented." (BBC, Editorial Guidelines, editorialguidelines/edguide/impariality/;
accessed January 23, 2008). As on so many other issues that we have
examined in media alerts over the years, this is simply BBC rhetoric.

Meanwhile the threat of global economic recession, the horrific divisions
between rich and poor, and worldwide climate chaos, threaten to engulf us

¤ ¤ ¤ ¤ ¤


The goal of Media Lens is to promote rationality, compassion and respect
for others. If you do write to journalists, we strongly urge you to
maintain a polite, non-aggressive and non-abusive tone.

Write to: Hamish McRae, Independent economics commentator

Write to: Martin Wolf, Financial Times columnist

Write to Helen Boaden, BBC news director

Please send a copy of your emails to us


Book review: "Israel and the Clash of Civilisations"

Raymond Deane, The Electronic Intifada, 11 February 2008

Much debate on conflict in the Middle East is beset by contradictions and
unanswered questions. These include: If the war in Iraq was motivated by
oil, then why was it opposed by so many within the oil industry itself?
Was the US incited by the omnipotent Zionist lobby to a war that is
opposed to America's vital interests (and is the lobby omnipotent?)? Or is
Israel merely a tool of the US establishment, seen as a vital defender of
Western interests in the recalcitrant Orient?

In his second book, Nazareth-based English author Jonathan Cook seeks to
cut these Gordian knots, and in the process proposes an uncompromisingly
grim diagnosis of what is happening in the world's most unstable region,
and why it is happening.

Borrowing analysis by Greg Palast, Cook accepts that the oil industry
wished to see Saddam toppled, but maintains that it envisaged "a US-backed
coup by a Ba'athist army general; the new strongman would be transformed
into a democratic leader by elections held within three months." There
would ensue "the creation of an Iraqi state-owned company that would
restrict production, staying within quotas and shoring up Saudi Arabia's
control of OPEC ... The neocons, on the other hand, wanted the Iraqi oil
industry privatized so that the global market could be flooded with cheap
oil and the Saudi-dominated cartel smashed."

Given that Saudi Arabia is "Israel's only Middle Eastern rival for
influence in Washington," the Jewish state had long desired to see the
destruction of OPEC, which would also deprive the Saudis of their "muscle
to finance Islamic extremists and Palestinian resistance movements."
Furthermore, as far back as 1982 the Israeli newspaper Haaretz's legendary
military correspondent Ze'ev Schiff (recently deceased) had written that
Israel's "best" interests would be served by "the dissolution of Iraq into
a Shi'ite state, a Sunni state and the separation of the Kurdish part," a
prescription that the US is attempting to fill a quarter of a century
later. Israel was also wary of "strongmen" who might act as a focus to
awaken the dozing giant of Arab nationalism, although Quislings are always

Clearly Israeli and US neoconservative perceived interests are being met
by the current Iraq war better than by its predecessor, when George H.W.
Bush, advised by the wily oilman James Baker, declined to advance on
Baghdad and oust Saddam Hussein, whose survival was still regarded as
essential for "stability" in the region.

Six months before the 2003 reinvasion of Iraq, the egregious neocon
Michael Ledeen wrote: "We do not want stability in Iran, Iraq, Syria
Lebanon and even Saudi Arabia; we want things to change. The real issue is
not whether, but how to destabilize." Clearly, a cynical travesty of
Schumpeter's "creative destruction" has become the motto for a breed of
militaristic ideologues whose element is chaos.

If Israel is "the region's policeman," then, it is "one spreading discord
rather than order ..." The Israeli army, in reality that country's
"permanent government," is braced for permanent warfare, using Gaza and
the West Bank as laboratories from which to export ideas, techniques and
technologies. "The US Department of Homeland Security was one of Israel's
most reliable markets, buying high-tech fences, unmanned drones, biometric
IDs, video and audio surveillance gear, air passenger profiling and
prisoner interrogation systems." Naomi Klein's The Shock Doctrine may be
read as a complementary account to Cook's, albeit on a broader canvas.

As against "Chomsky's view that the positions of AIPAC and the Israeli
lobby mainly reflected US interests in the Middle East," Cook cites
Chomsky's own view in the early 1980s that Israel sought the
"Ottomanization" of the region, "that is, a return to something like the
system of the Ottoman empire, with a powerful center (Turkey then, Israel
with US-backing now) and much of the region fragmented into
ethnic-religious communities ..." (Chomsky's The Fateful Triangle). What
this would entail is laid out in the words of Hizballah's astute leader
Hassan Nasrallah. In Lebanon, "There will be a Sunni state, an Alawi
state, a Christian state, and a Druze state," although a Shiite state may
well be prevented. Israel, Nasrallah adds, will be surrounded by "small
tranquil states. I can assure you that the Saudi kingdom will also be
divided, and the issue will reach to North African states ... Israel will
be the most important and the strongest state in a region that has been
partitioned into ethnic and confessional states that are in agreement with
each other. This is the new Middle East." Meanwhile, the US and its
accomplices will have obligingly split Iraq into three quiescent
statelets, as we have seen.

But Cook doesn't uncritically adhere to the position of US academics
Stephen Walt/John Mearsheimer that, as he paraphrases it, "much of the
foreign policy making process in the US had been effectively hijacked by
agents of a foreign power, and that it was Israel really pulling the
strings in Washington through its neocon allies and groups like AIPAC ..."
He asks "If such commitment to Israeli interests was simply an effect of
the pro-Israel lobby ..., why had the previous Bush Sr and Clinton
presidencies not pursued similar policies in the Middle East to Bush Jr?"
and cites a number of instances where the US has disregarded Israeli
wishes, including "disputes over Israeli arms sales to China ..., the
current Bush administration's quiet non-response to Israeli requests for
financial compensation for its Gaza 'withdrawal' and its message to the
Olmert government that it should not ask for funding for its 'convergence
plan' ..."

I'm not so sure about Cook's other examples. "Reagan's sale of AWACS
planes to Saudia Arabia" could surely be attributed to the different
conditions of an earlier historical conjuncture. While Reagan in many ways
anticipated the worldview of the neocons (some of whom cut their fangs in
his administration), it's hard to read Cook without becoming convinced
that neoconservatism was the dominant ideology in Israel decades before it
came home to roost in the US. As for "the first Bush administration's
threat to withhold loan guarantees," often cited in similar contexts,
surely the Zionist lobby's subsequent vengeful role in stymieing Bush Sr's
re-election suggests an interpretation of this gesture's consequences more
flattering to the power of the lobby's long arm.

On the other hand, there have been occasions when the Israeli tail has
seemed to be wagging the US dog, most notably the murky case of the USS
Liberty, victim of a deliberate lethal attack during the 1967 War, for
which crime no subsequent US government has held Israel accountable. In
1978, President Carter was humiliated when the Israelis invaded and
occupied south Lebanon against his wishes. Cook seems a little uneasy
about these incidents, and his hypothetical explanations of the US
behemoth's seemingly helpless tolerance are hedged around with many a
"possibly" and a "doubtless" (the latter usually a reliable indicator of
doubt). Yet it is impossible, after reading this short but densely-packed
and unswervingly logical book, to disagree with Cook's knot-cutting
conclusion that "the dog and tail wag each other."

I have described Cook's diagnosis as "uncompromisingly grim," and it must
be said that Israel and the Clash of Civilisations left this reader with a
depressing sense of impotence. Cook attempts to cheer us up in his final
paragraph, concluding that "The most likely outcome [of US-Israeli efforts
to remake the Middle East] ... was the forging of new political, religious
and social alliances across the Middle East whose effects it was almost
impossible to predict or imagine." Perhaps, however, there is more hope to
be gleaned from the preface: "It is not entirely accidental that in
dragging the US into a direct occupation of Iraq that mirrors Israel's own
much longer occupation of the Palestinian territories, Israel has ensured
that the legitimacy of both stands or falls together." Perhaps we are not
too far from the day when the illegitimacy of the Iraq adventure will
become so patent to Americans themselves that their blind support for the
Zionist project will at last evaporate.

Raymond Deane is a composer, and a founding member of the Ireland
Palestine Solidarity Campaign.