Dr Susan George is well known for her extensive writing on the causes of hunger in the Third World and the social and economic implications of the debt crisis (A Fate Worse than Debt, How the Other Half Dies, Ill Fares the Land). She is a researcher for the Transnational Institute, a green think-tank in Amsterdam, and a member of the international board of Greenpeace. George is also an outspoken critic of the World Bank and its lending policies and an activist in the "50 years is enough" campaign. Later this year, she and anthropologist Fabrizio Sabelli will launch their new book Faith and Credit: The World Bank's Secular Empire. George was a keynote speaker at the International Green Left Conference held in Sydney at Easter. This is an edited version of her feature talk, which opened the conference.
"The Global Octopus" was the title suggested for this talk, but I didn't think that was appropriate because "octopus" supposes that there's a brain somewhere! Yes, globalisation, and yes, empire, but no guiding hand, and no guiding brain. I don't believe there is a conspiracy of power, that somewhere there's a boardroom of people saying "What can we do next?". But certainly, the tendencies towards a globalisation of all kinds seem to be converging along a very dangerous path.
I want to begin by looking at a few different development models of the world. Firstly, there's the standard United Nations version: a sphere cut in half between the rich North (all the OECD countries) and the poor South (the rest of the world). Then there's the centre-periphery model in which there's a North, a South, a centre and a periphery. This model takes social classes into consideration.
However, in this era of globalisation, we now have a third model, which is pyramidal. At the apex there's a transnational elite with a lot more in common with each other than with their own people. This elite class, through global financial and industrial transactions, as well as the global political system, more or less work together.
Under the apex are the more or less secure middle class, those who still have jobs and a foothold in society. At the base of the pyramid, there are more and more people who are not simply exploited, but excluded.
Of course, when you look at pyramids for different parts of the world, the proportions are different. In the rich countries, the elite is perhaps 5-10% of the population, and the middle class is really quite broad. But the excluded are growing in number. Even in France, with its 12% unemployment and growing numbers of homeless, there are people who no longer have a foothold in society.
The same sort of pyramid model applied to the poor South would have about the same numbers in the elite, but with a much smaller middle class and a much larger base of excluded people. And if this model is applied to the whole world, the North would make up less than 20% of the world's population. The excluded in the North and the South would now make up about 2/3 of the world's population. This is a recipe for disaster.
How did we get to such a situation? In the 18th century, the gap between the poor and the rich nations was about 2 to 1. After World War II this gap grew to something like 30 or 40 to 1. Today it is more like 60 to 1. By whatever measure you use, the gap between the rich and poor is infinitely larger today than it was 200 years ago.
One of the reasons for this immense gap is increasing globalisation in all kinds of areas.
First, let's take a look at the globalisation of corporations. Today, the top 500 transnational corporations account for about one-third of world trade. They are also responsible for about a quarter of gross world product. This gives you an inkling of the power of these corporations.
However, these corporations do not employ proportionally the labour that this enormous turnover would imply. In the developed world, they employ less than 10% of the population. In the poor world, it is less than 1%. Anyone who believes that foreign investment by these corporations is going to provide employment for the hundreds of millions of people who need it is deluded. These corporations are not interested in employing people. Their purpose is to make a profit.
The recently completed Uruguay round of the General Agreement on Tariffs and Trade (GATT) has also been an instrument for transnationals to gain more power. There will now be even fewer obstacles to their global reach.
Transnationalisation has gone well beyond industry, agriculture and the service industries. It has gone into the intangibles of entertainment, insurance, banking and intellectual property. Transnational corporations now control a much broader segment of the economy. This is new.
The main provisions of the Uruguay agreement which the transnationals were very anxious to get through went beyond tariffs to barriers referred to as "trade related". This includes workplace, environmental and health and safety standards.
For example, environmental safeguards that cost money can be removed. The argument will be that this is necessary to remain competitive in the global market. The global market is rapidly becoming an excuse for attempting to remove a great many of the gains of workers, farmers and women.
Under GATT's new environmental regulations, Australia's standards against importing dangerous pesticides can be superseded by the standards set by the GATT agreement. Australia could be forced to import fruits or vegetables or any other product which has higher levels of pesticide than your national legislation allows. Why? Because the GATT standard will become the codex alimentarius, a much lower standard than that set by developed countries.
I'll give you another example of how this is working in practice. Under the United States-Canada free trade agreement, British Columbia was using a government-subsidised program to reforest an area when the US timber industry complained, saying this was a trade-related barrier since they did not have a similar government program. The Canadians were forced to withdraw the government subsidy. It's extremely difficult to maintain national environmental standards in the face of these international agreements.
We are now living in a post-Cold War world, a unipolar world in which there is only one superpower. The impact of this on the South could be extremely dangerous. While billions were spent uselessly on defence during the Cold War, the upside was that no place on earth was unimportant. Every country could be the place where the rival power could get a foothold. Now, without that rivalry, lots of places on earth have stopped being important.
Not only that: I don't see the West going for a very long time without an enemy. It hasn't been able to for the last 500 years or so, and I feel that the East-West conflict may very likely be replaced by a North-South conflict.
An influential Harvard University scholar, Samuel Huntington, published a widely commented upon article last year in Foreign Affairs called "The Clash of Civilization", in which he said the era of civil wars of the West has ended: they were first between principalities and princes, then between nation states, but now, he says, this period of history is over. His conclusion is that we are moving towards an era where the fights will be between civilisations. He picks out Confucian civilisation and Islamic civilisation as the new enemies. He calls this new division "the West and the rest".
Certainly in Europe, there is a grave danger of such divisions. Today, I think we have to guard even more against racism than we did before. You will notice that aid to Africa is declining, and that many countries are being considered as without importance.
The pyramidal model exists because of the particular global development model practised over the last 40 years or so by the World Bank. The bank sees its model as a truth, and it has the political power to put that truth into practice in dozens of societies.
The premise of this model is that all societies have to be modernised along the same lines. It assumes that societies have no particular characteristics of their own. The World Bank and bilateral agencies applied their version of this development model without regard to any particular natural environment or culture. It assumed that indigenous people had no particular knowledge, nothing to contribute themselves, and that development would have to be done for them. All societies were supposed to follow exactly the same stages of economic growth until they got to the "take-off" phase.
This is one of the reasons that former World Bank president Robert McNamara could seriously believe he was going to channel development through these countries' elites, against whom, by his own reckoning, at least 80 uprisings were then in progress.
That was the bank's first model; it took no regard for history, culture, local knowledge or nature. Its second incarnation, begun with the onset of the debt crisis, was the structural adjustment or austerity model. This means that countries must adjust their incomes to earning as much as they can in the global market.
To that end, they must devalue their currencies, lower their imports and integrate their own economies to the greatest degree possible with the global market. At the same time they must spend far less, "downsize" their civil services and cut budgets relating to health, education and other public service sectors.
The World Bank and International Monetary Fund work in tandem, with what they call "cross conditionality". That means that if a country doesn't apply the program of the one, it will get no money from the other. Indebted countries must obey these programs; otherwise no money will come from any other source, not even an export credit.
This enormous leverage, combined with the debt, has allowed these lending institutions to impose their austerity programs. Countries find they cannot borrow anywhere else and so are obliged to go to the World Bank and IMF for new loans.
In the space of about a decade, about 90 countries have been placed under structural adjustment. This is perhaps the greatest transformation that the world has ever known.
The bank has not been obliged to confront the human and ecological consequences of this globalised model. It is putting its universal truth into practice, but it does not have to take responsibility for what happens.
As you can see, debt is a political, not an economic, issue.
The environment is going to become what economists call "the limiting factor". Classical economists still say that man-made or financial capital is the limiting factor: that is, if you have no money to invest, you cannot create wealth.
But if there are no more trees, it does not matter how many sawmills you have. A forests cut down in one place by one company affects us all.
Huge corporations are also destroying the fish stocks. When global warming strikes or when the ozone has a hole in it because of industrial activity, we know this is a global problem. This cannot be dealt with by individual governments. We are globalised whether we like it or not.
Unfortunately, no-one seems to be taking responsibility for these global processes. An almost toothless biodiversity or greenhouse gas convention will not do the trick.
The scale of human activity is pushing against the confines of the biosphere. We live in a closed biosphere, and nothing we can do with our technology will increase it. Yet the scale of human activity now demands about 40% of what scientists call the "net photosynthetic product", that is all of the energy that the sun can supply. We are only leaving 60% for the other species. This human activity is doubling every 25 or 30 years. Already, in the 1990s, we produce as much in two weeks as was produced in the entire year of 1900 or 1910.
This continual expansion goes on in a globalised world where no machinery is set up to deal with what I believe to be the threshold of a global catastrophe. We have depended on the market mechanism. That is also the mechanism the bank counts on.
Although the market can do many things extremely well, it is absolutely incapable of telling us the costs of anything in either ecological or social terms. To rely on the market in a globalised world is suicidal. It is not telling us what the destruction of the environment is going to cost us.
It doesn't even tell us the real cost of the extraction of raw material; the prices it sets for Third World raw materials are completely false. Why? Because everybody under structural adjustment is trying to export a limited range of goods at the same time, making it perfectly normal that prices are at rock bottom.
Even worse, nowhere is the cost of the depletion of natural resources accounted for. In our industrial system, we draw down natural capital and we count it as income. If you count your natural capital as income, pretty soon you aren't going to have any income. This is done in the name of growth, of increasing national product.
The market tells us nothing about the social costs of the global system in which everyone is encouraged to participate as an individual in the economic system. This is a machine to exclude people. The market cannot hear the signals of those who have no purchasing power. Therefore to rely on the market as the TNCs, the World Bank, GATT and the G7 do, as the mechanism which is going to regulate society, automatically means exclusion for those who cannot make their voices heard.
That is why I believe we have come full circle and reached a pyramidal structure in which approximately one-third of the world has a foothold in the system and there are absolutely no plans for the other two-thirds.
Does this model reminds you of something? It reminds me of the apartheid system. What none of us could have accepted for one country, we seem to be willing to accept for the whole world.
Can we accept this kind of globalised system? There is an empire of interests; a very small group of people is making a great deal of money. During the '80s in the US the top 1% of the households increased their share of income by 50%. In Britain it was approximately the same. In the US, 10% of the poorest people lost 15% of what little they had. There has been enormous polarisation through this system, which is natural if you rely on the market to make your social decisions for you.
It will make those decisions against the poor, against social justice, against the environment.
If we want to change this system of global apartheid, what are the paths for people who are willing to do something about it?
We all have to be much more active citizens, and that takes time. We have to reclaim the democratic process. Many people who came before us died in order for us to have the democratic freedoms we have.
It seems to me that there needs to be a much more important role for the national state. The state is losing many of its prerogatives. For instance, the bank erodes the capacity of governments to make any choices on their own. They are no longer in charge. We have to preserve the capacity of our governments to make their own decisions.
The local economy needs to be preserved. This is the first time in history when the entire world is being encouraged to go to the global economy first for its needs. Indebted countries especially are forced to do that.
Previously, most of our necessities came from close by. Only after exhausting those possibilities would one go to the global market. Now we are being told to do this the other way around. The local economy is seen as the least valuable of all. This may be one reason why women's work is so undervalued. Anything which boosts and raises the capacity of the national economy to satisfy local needs is to be welcomed.
At the macro level, we need a true costing of the resources we are destroying. This can only be done through fiscal policy. We could have a green tax reform and tax pollution, waste and carbon dioxide as well as the destruction of natural resources. And we should tax less what we want more of, that is, employment and basic goods and services.
Young people are being handed a very difficult, but historic, task. All of the struggles that had to go on in the 19th century against the ruling class and national governments are the sorts of struggles that have to be taken up now against this global empire and its institutions, which are totally undemocratic and unaccountable.
It's your very difficult task to be the people who will have to deal with an increasingly globalised world and to insist that these international institutions become accountable. This can be accomplished only through democratic struggle, such as the "50 years is enough" campaign which is working to force the World Bank and the IMF to become more accountable.