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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (16546)	1/16/2002 9:48:51 AM
From: Ilaine	Respond to of 281500

Interesting speech by Noam Chomsky, in the sense that if you turn what he says inside out and backwards, he's explaining one of the left's major arguments against globalization, especially the privatization of international capital flows: it deprives governments of the ability to exercise social control over the use of capital. "There was a period up to the early 1970s when the Bretton Woods arrangements were in place with capital controls and regulated currencies. That was a period of very substantial and equitable economic growth. It’s commonly called "the golden age" of capitalism. That changed in the last twenty-five years, with the breakdown of the Bretton Woods system. Financial markets were liberalized, constraints on capital flow were eliminated, and currencies were deregulated. That has been associated with a marked deterioration in standard measures of the economy -- the rate of growth of the economy, of productivity, of investment, in fact even growth of trade. Even with all the misleading definitions of trade, its growth has declined during the globalisation period, these last twenty-five years. There have been much higher interest rates, which harm the economy, increasing financial volatility, and other harmful consequences. So let’s return to that profound and troubling dilemma that we’re supposed to be worried about. The rapid growth and great prosperity brought by so-called globalisation has also brought global inequality because some lack the skills to use the opportunities. There is no dilemma: the rapid growth and prosperity are simply a myth, except for a very small sector. One can debate the economic consequences of liberalisation of capital, but one consequence is very clear: it undermines democracy. That was understood very well by the framers of the Bretton Woods agreement after World War II – the U.S. and Britain. One reason, explicit reason, why those arrangements were founded on regulation of capital was in order to allow governments to carry out social democratic programmes, which had enormous popular support, in the United States as well. Free capital movement yields what’s called a ``Virtual Parliament,’’ which has "veto power" over government decisions, sharply restricting democratic options. I’m quoting from technical papers on the financial system now: With free movement of capital, governments face a "dual constituency" – voters and speculators. Speculators "conduct moment-by-moment referendums on government policies," and if they don’t like them, they "veto" them by attacking the country’s currency or removing its capital. Even in rich countries, the private constituency prevails. That’s understood to be a very striking difference, maybe the most significant difference, between the current phase of globalisation and the period before World War I, which it partly resembles. . . . . This term, ``trade in services,’’ is, in fact, a euphemism for programmes that are designed to undermine popular sovereignty and reduce the arena of democratic choice by transferring decisions over the most important aspects of life from the public arena to unaccountable private tyrannies.<< flonnet.com There are two kinds of people, Chomsky says, those with money and those without. And the unfettered, unregulated flow of private capital prevents those without money from being able to vote that the money should be spent on themselves, which he says is "undemocratic." The people who have the money are no longer accountable to the majority without money. I love it. I haven't read anything more encouraging in years. BTW, the fathers of Bretton Woods, John Maynard Keynes and Harry Dexter White, were both lefties. White was actually a Soviet agent according to declassified documents recently released by the NSA.