The Great Libyan Distraction
The entire Libyan conflict of the last month – the civil war in Libya, the U.S.-led military action against Gaddafi – is neither about humanitarian intervention nor about the immediate supply of world oil. It is in fact one big distraction – a deliberate distraction – from the principal political struggle in the Arab world. There is one thing on which Gaddafi and Western leaders of all political views are in total accord. They all want to slow down, channel, co-opt, limit the second Arab revolt and prevent it from changing the basic political realities of the Arab world and its role in the geopolitics of the world-system.
Libya and the World Left
There is so much hypocrisy and so much confused analysis about what is going on in Libya that one hardly knows where to begin. The most neglected aspect of the situation is the deep division in the world left. Several left Latin American states, and most notably Venezuela, are fulsome in their support of Colonel Qaddafi. But the spokespersons of the world left in the Middle East, Asia, Africa, Europe, and indeed North America, decidedly don’t agree.
Hugo Chavez’s analysis seems to focus primarily, indeed exclusively, on the fact that the United States and western Europe have been issuing threats and condemnations of the Qaddafi regime. Qaddafi, Chavez, and some others insist that the western world wishes to invade Libya and “steal” Libya’s oil. The whole analysis misses entirely what has been happening, and reflects badly on Chavez’s judgment – and indeed on his reputation with the rest of the world left.
First of all, for the last decade and up to a few weeks ago, Qaddafi had nothing but good press in the western world. He was trying in every way to prove that he was in no way a supporter of “terrorism” and wished only to be fully integrated into the geopolitical and world-economic mainstream. Libya and the western world have been entering into one profitable arrangement after another. It is hard for me to see Qaddafi as a hero of the world anti-imperialist movement, at least in the last decade.
The second point missed by Hugo Chavez’s analysis is that there is not going to be any significant military involvement of the western world in Libya. The public statements are all huff and puff, designed to impress local opinion at home. There will be no Security Council resolution because Russia and China won’t go along. There will be no NATO resolution because Germany and some others won’t go along. Even Sarkozy’s militant anti-Qaddafi stance is meeting resistance within France.
And above all, the opposition in the United States to military action is coming both from the public and more importantly from the military. The Secretary of Defense, Robert Gates, and the chairman of the Joint Chiefs of Staff, Adm. Mullen, have very publicly stated their opposition to instituting a no-fly zone. Indeed, Secretary Gates went further. On Feb. 25, he addressed the cadets at West Point, saying to them: “In my opinion, any future defense secretary who advises the president again to send a big American land army into Asia or the Middle East or Africa should have his head examined.”
To underline this view of the military, retired General Wesley Clark, the former commander of NATO forces, wrote an op-ed for the Washington Post on Mar. 11, under the heading, “Libya doesn’t meet the test for U.S. military action.” So, despite the call of the hawks for U.S. involvement, President Obama will resist.
The issue therefore is not Western military intervention or not. The issue is the consequence of Qaddafi’s attempt to suppress all opposition in the most brutal fashion for the second Arab revolt. Libya is in turmoil because of the successful uprisings in Tunisia and Egypt. And if there is any conspiracy, it is one between Qaddafi and the West to slow down, even quash, the Arab revolt. To the extent that Qaddafi succeeds, he sends a message to all the other threatened despots of the region that harsh repression rather than concessions is the way to go.
This is what the left in the rest of the world sees, if some left governments in Latin America do not. As Samir Amin points out in his analysis of the Egyptian uprising, there were four distinct components among the protestors – the youth, the radical left, middle-class democrats, and Islamists. The radical left is composed of suppressed left parties and revitalized trade-union movements. There is no doubt a much, much smaller radical left in Libya, and a much weaker army (because of Qaddafi’s deliberate policy). The outcome there is therefore very uncertain.
The assembled leaders of the Arab League may condemn Qaddafi publicly, but many, even most, may be applauding him privately – and copying from him.
It might be useful to end with two pieces of testimony from the world left. Helena Sheeham, an Irish Marxist activist, well-known in Africa for her solidarity work there with the most radical movements, was invited by the Qaddafi regime to come to Libya to lecture at the university. She arrived as turmoil broke out. The lectures at the university were cancelled, and she was finally simply abandoned by her hosts, and had to make her way out by herself. She wrote a daily diary in which, on the last day, Mar. 8, she wrote: “Any ambivalence about that regime, gone, gone, gone. It is brutal, corrupt, deceitful, delusional.”
We might also see the statement of South Africa’s major trade-union federation and voice of the left, COSATU. After praising the social achievements of the Libyan regime, COSATU said: “COSATU does not accept however that these achievements in any way excuse the slaughter of those protesting against the oppressive dictatorship of Colonel Gaddafi and reaffirms its support for democracy and human rights in Libya and throughout the continent.”
Let us keep our eye on the ball. The key struggle worldwide right now is the second Arab revolt. It will be hard enough to obtain a truly radical outcome in this struggle. Qaddafi is a major obstacle for the Arab, and indeed the world, left. Perhaps we should all remember Simone de Beauvoir’s maxim: “Wanting to be free yourself means wanting that others be free.”
The Wind of Change – in the Arab World and Beyond
Fifty-one years ago, on Feb. 3, 1960, the then Prime Minister of Great Britain, Harold Macmillan, a Conservative, addressed the South African parliament, governed by the party that had constructed apartheid as its basis of government. He made what has come to be called the “wind of change” speech. It is worth recalling his words:
“The wind of change is blowing through this continent, and whether we like it or not, the growth of national consciousness is a political fact. We must all accept it as a political fact, and our national policies must take account of it.”
South Africa’s Prime Minister, Hendrik Verwoerd, did not appreciate the talk and rejected its premises and its advice. The year 1960 has come to be called the Year of Africa, because 16 colonies become independent states that year. Macmillan’s speech was in fact really addressing the issue of those states in the southern half of the continent that had significant groups of White settlers (and often great mineral resources), who resisted the very idea of universal suffrage in which Black Africans would constitute the overwhelming majority of the voters.
Macmillan was scarcely a radical. He explained his reasoning in terms of winning over Asian and African populations to the Western side in the Cold War. His speech was significant in that it was the signal that the leaders of Great Britain (and subsequently those of the United States) saw the cause of White electoral dominance in southern Africa as a doomed cause that might drag the West down alongside them. The wind kept blowing, and in one country after another the African majority won their case, until in 1994 South Africa itself succumbed to universal suffrage and elected Nelson Mandela as its president. In the process, however, the economic interests of Great Britain and the United States were somehow preserved.
There are two lessons we can draw from this. One is that winds of change are very strong and probably impossible to resist. The second is that once the winds sweep away the symbols of tyranny, it is not at all certain what will follow. Once the symbols fall, everyone retrospectively denounces them. But everyone also wants their own interests to be preserved in the new structures that emerge.
The second Arab revolt that began in Tunisia and Egypt is now engulfing more and more countries, and no doubt some further symbols of tyranny will fall or will concede major modifications of their internal state structures. But who will then retain the power? Already in Tunisia and Egypt we see a situation in which the new prime ministers have been persons who were key figures in the previous regime. And the army in both countries seems to be telling protestors to stop protesting. In both countries, there are returnees from exile who are assuming posts and seeking to continue, even expand, ties with the very countries in western Europe and North America that had sustained the previous regimes. To be sure, the popular forces are fighting back, and just now have been able to force the resignation of the Tunisian prime minister.
In the middle of the French Revolution, Danton counseled “de l’audace, encore de l’audace, toujours de l’audace.” (“Audacity, more audacity, always audacity.”) Good advice perhaps, but Danton was guillotined not long thereafter. And those who guillotined him were in turn guillotined. After that we had Napoleon, and then the Restoration, and then 1848, and then the Paris Commune. By 1989, at the Bicentennial, virtually everyone retrospectively was in favor of the French Revolution, but one can reasonably ask if the trinity of the French Revolution – liberty, equality, and fraternity – have in fact been realized.
There are some things that are different today. The wind of change is now truly worldwide. For the moment, the epicenter is the Arab world, and the wind is still whirling ferociously there. No doubt, the geopolitics of this region will never be the same. The key places on which to keep one’s eyes are Saudi Arabia and Palestine. If the Saudi monarchy comes under serious challenge – and it seems at least possible that it will – no regime in the Arab world will feel safe. And if the wind of change leads the two main political forces of Palestine to join hands, even Israel may feel it necessary to adapt to the new realities and take account of Palestinian national consciousness, whether it likes it or not – to paraphrase Harold Macmillan.
Needless to say, the United States and western Europe are doing everything in their power to channel, limit, and redirect the wind of change. But their power is not what it used to be. And the wind of change is blowing within their very own home grounds. That is the way of winds. Their direction and momentum is not constant and therefore not predictable. This time the wind is very strong. It may not be so easy any more to channel, limit, and redirect it.
The World Social Forum, Egypt, and Transformation
The World Social Forum (WSF) is alive and well. It just met in Dakar, Senegal from Feb. 6-11. By unforeseen coincidence, this was the week of the Egyptian people’s successful dethroning of Hosni Mubarak, which finally succeeded just as the WSF was in its closing session. The WSF spent the week cheering the Egyptians on – and discussing the meaning of the Tunisian/Egyptian revolutions for their program of transformation, for achieving another world that is possible – possible, not certain.
Somewhere between 60,000 and 100,000 people attended the Forum, which is in itself a remarkable number. To hold such an event, the WSF requires strong local social movements (which exist in Senegal) and a government that at least tolerates the holding of the Forum. The Senegalese government of Abdoulaye Wade was ready to “tolerate” the holding of the WSF, although already a few months ago it reneged on its promised financial assistance by three-quarters.
But then came the Tunisian and Egyptian uprisings, and the government got cold feet. What if the presence of the WSF inspired a similar uprising in Senegal? The government couldn’t cancel the affair, not with Lula of Brazil, Morales of Bolivia, and numerous African presidents coming. So it did the next best thing. It tried to sabotage the Forum. It did this by firing the Rector of the principal university where the Forum was being held, four days before the opening, and installing a new Rector, who promptly reversed the decision of the previous Rector to suspend classes during the WSF so that meeting rooms be available.
The result was organizational chaos for at least the first two days. In the end, the new Rector permitted the use of 40 of the more than 170 rooms needed. The organizers imaginatively set up tents across the campus, and the meeting proceeded despite the sabotage.
Was the Senegalese government right to be so frightened of the WSF? The WSF itself debated how relevant it was to popular uprisings in the Arab world and elsewhere, undertaken by people who had probably never heard of the WSF? The answer given by those in attendance reflected the long-standing division in its ranks. There were those who felt that ten years of WSF meetings had contributed significantly to the undermining of the legitimacy of neoliberal globalization, and that the message had seeped down everywhere. And there were those who felt that the uprisings showed that transformational politics lay elsewhere than in the WSF.
I myself found two striking things about the Dakar meeting. The first was that hardly anyone even mentioned the World Economic Forum at Davos. When the WSF was founded in 2001, it was founded as the anti-Davos. By 2011, Davos seemed so unimportant politically to those present that it was simply ignored.
The second was the degree to which everyone present noted the interconnection of all issues under discussion. In 2001, the WSF was primarily concerned with the negative economic consequences of neoliberalism. But at each meeting thereafter the WSF added other concerns – gender, environment (and particularly climate change), racism, health, the rights of indigenous peoples, labor struggles, human rights, access to water, food and energy availability. And suddenly at Dakar, no matter what was the theme of the session, its connections with the other concerns came to the fore. This it seems to me has been the great achievement of the WSF – to embrace more and more concerns and get everyone to see their intimate interconnections.
There was nonetheless one underlying complaint among those in attendance. People said correctly we all know what we’re against, but we should be laying out more clearly what it is we are for. This is what we can contribute to the Egyptian revolution and to the others that are going to come everywhere.
The problem is that there remains one unresolved difference among those who want another world. There are those who believe that what the world needs is more development, more modernization, and thereby the possibility of more equal distribution of resources. And there are those who believe that development and modernization are the civilizational curse of capitalism and that we need to rethink the basic cultural premises of a future world, which they call civilizational change.
Those who call for civilizational change do it under various umbrellas. There are the indigenous movements of the Americas (and elsewhere) who say they want a world based on what the Latin Americans call “buen vivir” – essentially a world based on good values, one that requires the slowing down of unlimited economic growth which, they say, the planet is too small to sustain.
If the indigenous movements center their demands around autonomy in order to control land rights in their communities, there are urban movements in other parts of the world who emphasize the ways in which unlimited growth is leading to climate disaster and new pandemics. And there are feminist movements who are underlining the link between the demands for unlimited growth and the maintenance of patriarchy.
This debate about a “civilizational crisis” has great implications for the kind of political action one endorses and the kind of role left parties seeking state power would play in the world transformation under discussion. It will not be easily resolved. But it is the crucial debate of the coming decade. If the left cannot resolve its differences on this key issue, then the collapse of the capitalist world-economy could well lead to a triumph of the world right and the construction of a new world-system worse even than the existing one.
For the moment, all eyes are on the Arab world and the degree to which the heroic efforts of the Egyptian people will transform politics throughout the Arab world. But the tinder for such uprisings exists everywhere, even in the wealthier regions of the world. As of the moment, we are justified in being semi-optimistic.
The Second Arab Revolt: Winners and Losers
The Arab Revolt of 1916 was led by Sharif Hussein bin Ali for Arab independence from the Ottoman Empire. The Ottomans were evicted. The great revolt however was co-opted by the British and the French. After 1945, the various Arab states gradually became independent members of the United Nations. But in most cases their independences were co-opted by the United States as the successor to Great Britain as outside controller, with a minor continuing role of France in the Maghreb and Lebanon.
The second Arab Revolt has been brewing for some years now. It got a substantial shot in the arm from the successful uprising of Tunisian youth this past month. When courageous young people risk their lives to rise up against a supercorrupt authoritarian regime and actually succeed in deposing the president, one has to applaud. Whatever happens next, it was a good moment for humanity. The question always is, what comes next?
Actually, there are two questions. How come this uprising succeeded, when many other attempts in many countries did not? And then who will be the winners and losers in Tunisia, elsewhere in the Arab world, in the whole world-system?
It is not easy to rebel against an authoritarian regime. The regime has guns and money at its disposal, and normally can simply suppress attempts to defy it in the streets. Symbolic acts, like the self-immolation of a young street merchant in a remote Tunisian town, Mohamed Bouazizi, in protest against the capricious acts of agents of the regime, can ignite others into protesting, as happened in Tunisia. But for this act to lead to the overthrow of the regime, there must be fissures in that regime.
In this case, there clearly were. Neither the army nor the gendarmerie was ready to shoot at the protestors, leaving this task only to the elite presidential guard. It was not enough, and President Zine el-Abidine Ben Ali and his family had to flee, able to find refuge only in Saudi Arabia. That there were fissures in the regime is shown clearly by the fact that the leading figures of Ben Ali’s party, trying to survive the storm, made sure to arrest the key figure of Ben Ali’s enforcement machinery, Abdelwahab Abdallah, lest he in turn arrest them. Remember how, after Stalin’s death, the successors immediately arrested Lavrenti Beria for the same reason.
Of course, after Ben Ali fled, the whole world applauded, with the sole exceptions of Kaddafi of Libya and Berlusconi of Italy, who continued to defend Ben Ali’s virtues. Ben Ali’s chief outside supporter, France, was sufficiently embarrassed to confess its “errors” of judgment. The United States, having left Tunisia to the supposedly safe hands of the French, did not feel the need to make a similar apology.
As everyone has noted, the Tunisian example encouraged the Arab street elsewhere to pursue a similar path – most notably for the moment in Egypt, Yemen, and Jordan. As I write, it is unsure if President Hosni Mubarak of Egypt will be able to survive.
Now, who are winners and losers? We shall not know for at least six months, perhaps longer, who will actually come to power in Tunisia, in Egypt, indeed everywhere in the Arab world. Spontaneous uprisings create a situation like that in Russia in 1917 when, in Lenin’s famous phrase, “power lay in the street,” and therefore an organized, determined force could seize it, which the Bolsheviks did.
The actual political situation in each Arab state is different. There is no Arab state today that has a strong organized, secular, radical party like the Bolsheviks, ready to try to take power. There are various bourgeois liberal movements that would like to play a major role, but few of them seem to have an important base. The most organized movements are the Islamist ones. But these movements are not of a single color. Their versions of an Islamic state range from those relatively tolerant of other groups, such as exists today in Turkey, to a harsh version of Shar’ia law (as the Taliban enforced in Afghanistan) to in-between varieties such as the Muslim Brotherhood in Egypt. The outcomes in terms of the internal regimes are uncertain and evolving. And therefore who wins internally is extremely unsure.
But what about the outside powers, who are heavily involved in attempting to control the situation? The principal outside actor is the United States. A second one is Iran. All the others – Turkey, France, Great Britain, Russia, China – are less important but nonetheless relevant.
The great loser of the second Arab Revolt is clearly the United States. One can see it by the incredible vacillation of the U.S. government in the present moment. The United States (like every other major power in the world) places one criterion before all others – regimes friendly to it. Washington wants to be on the side of the winner, provided the winner is not hostile. What to do then in a situation like that of Egypt, which presently is a virtual client-state of the United States? The United States is reduced to calling publicly for more “democracy,” no violence, and negotiations. Behind the scenes, they seem to have told the Egyptian army not to embarrass the United States by shooting too many people. But can Mubarak survive without shooting a lot of people?
The second Arab Revolt is occurring amidst a worldwide chaotic situation in which three features are dominant – a declining standard of living for at least two-thirds of the world’s populations; outrageous increases in the current income of relatively small upper strata; and a serious decline in the effective power of the so-called superpower, the United States. The second Arab Revolt, however it turns out, will further erode U.S. power, especially in the Arab world, precisely because the one sure base for political popularity in these countries today is opposition to the intrusion of the United States in their affairs. Even those who normally want and depend on U.S. involvement are finding it politically dangerous to continue to do so.
The biggest outside winner is Iran. The Iranian regime is no doubt viewed with considerable suspicion, partly because it is non-Arab and partly because it is Shi’a. It is however U.S. policy that gave Iran its greatest present – the ouster of Saddam Hussein from power. Saddam had been Iran’s fiercest and most effective enemy. The Iranian leaders probably say a daily blessing to George W. Bush for this wonderful present. They have built on this windfall by an intelligent policy wherein they have shown themselves ready to support non-Shi’ite movements such as Hamas, provided only that they are strongly opposed to Israel and to U.S. intrusion in the region.
A smaller winner has been Turkey. Turkey was long anathema to popular forces in the Arab world for the double reason that it was the heir to the Ottoman Empire and that it was closely allied with the United States. The popularly elected current regime, an Islamist movement that does not seek to impose shar’ia law on the entire population but simply droit de cité for Islamic observance, has moved in the direction of supporting the second Arab Revolt, even at the risk of compromising its previously good relations with Israel and the United States.
And of course the biggest winner of the second Arab Revolt will, over time, be the Arab peoples.
Self-Determination of Peoples? Which Self?
One of the guiding mantras of the twentieth century was the self-determination of peoples, of nations. It was a piety to which everyone assented in theory. But in practice, it was a very thorny, very murky subject. The key difficulty is how to determine which was the self, the people, the nation that would be entitled to determine its own destiny.
There was never any accord on this subject. In the case of colonies, it was a relatively simple question. But in the case of a state already recognized as a sovereign state, opinion was very divided, usually violently divided. The issue is in the headlines at the moment because of the referendum in southern Sudan where the “people” are voting on whether they wish to remain part of the state called Sudan or to constitute a new state separate from Sudan.
End of the Recession? Who’s Kidding Whom?
The media are telling us that the economic “crisis” is over, and that the world-economy is once more back to its normal mode of growth and profit. On December 30, Le Monde summed up this mood in one of its usual brilliant headlines: “The United States wants to believe in an economic upturn.” Exactly, they “want to believe” it, and not only people in the United States. But is it so?
First of all, as I have been saying repeatedly, we are not in a recession but in a depression. Most economists tend to have formal definitions of these terms, based primarily on rising prices in stock markets. They use these criteria to demonstrate growth and profit. And politicians in power are happy to exploit this nonsense. But neither growth nor profit is the appropriate measures.
There are always some people who are making profit, even in the worst of times. The question is how many people, and which people? In “good” times, most people are seeing an improvement in their material situation, even if there are considerable differences between those at the top and bottom of the economic ladder. A rising tide raises all ships, as the saying goes, or at least most ships.
But when the world-economy becomes stagnant, as the world-economy has been since the 1970s, several things happen. The numbers of people who are not gainfully employed and therefore receiving an income that is minimally adequate goes up considerably. And because this is so, countries try to export unemployment to each other. In addition, politicians tend to try to deprive the elderly retired persons and the young, pre-working-age persons of income in order to appease their voters in the usual working-age categories.
That is why, appraising the situation country by country, there are always some in which the situation looks much better than in most others. But which countries look better tends to shift with some rapidity, as it has been doing for the last forty years.
Furthermore, as the stagnation continues, the negative picture grows larger, which is when the media begin to talk of “crisis” and politicians look for quick fixes. They call for “austerity,” which means cutting pensions and education and child care even further. They deflate their currencies, if they can, in order that they reduce momentarily their unemployment rates at the expense of some other country’s employment rates.
Take the problem of government pensions. A small town in Alabama exhausted its pension fund in 2009. It declared bankruptcy and ceased paying its pensions, thereby violating state law which required it to do so. As the New York Times remarked, “It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the law and pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases, or make huge service cuts, to come up with the money. Current city workers could find themselves paying into a pension plan that will not be there for their own retirements.”
But this is the looming problem for every state within the United States who, by law, must have balanced budgets, which means they cannot resort to borrowing to meet current budgetary needs. And there is a parallel problem for every nation within the euro zone who cannot deflate their currencies in order to meet their budgetary needs, which has meant that their ability to borrow leads to exorbitant unsustainable costs.
But what, you may ask, about those countries where the economy is said to be “booming” such as Germany and most particularly, within Germany, Bavaria – called by some “the planet of the happy.” Why then do Bavarians “feel a malaise” and seem “subdued and uncertain about their economic health”? The New York Times notes that “Germany’s good fortune…is widely viewed (in Bavaria) as having come at the expense of workers, who for the past decade have sacrificed wages and benefits to make their employers more competitive….In fact, part of the prosperity comes from people not getting the social security they should have.”
Well then, at least, there is the good example of the “emerging economies” which have been showing sustained growth during the last few years – especially the so-called BRIC countries. Look again. The Chinese government is very concerned about the loose lending practices of Chinese banks, which seem to be a bubble, and leading to the threat of inflation. One result is the sharp increase in layoffs in a country where the safety net for the unemployed seems to have disappeared. Meanwhile, the new president of Brazil, Dilma Rousseff, is said to be disturbed by the “overvalued” Brazilian currency amidst what she sees as the deflating U.S. and Chinese currencies that, together, are threatening the ability of Brazilian exports to be competitive. And the governments of Russia, India, and South Africa are all facing rumbling discontent from large parts of their populations who seemed to have escaped the benefits of presumed economic growth.
Finally, and not least, there are the sharp rises in the prices of energy, food, and water. This is the result of a combination of world population growth and increased percentages of people demanding access. This portends a struggle for these basic goods, a struggle that could turn deadly. There are two possible outcomes. One is that large numbers of people will reduce the level of their demand – most unlikely. The second is that the deadliness of the struggle results in a reduced world population and thereby fewer shortages – a most unpleasant Malthusian solution.
As we enter this second decade of the twenty-first century, it seems improbable that by 2020 we shall look back on this decade as one in which the “crisis” was relegated to a historical memory. It is not very helpful to “wish to believe” in a prospect that seems remote. It does not help in trying to figure out what we should do about it.
Mr. Putin Makes an Audacious Offer
Prime Minister Vladimir Putin of Russia visited Germany in the end of November. Before arriving there, he published an op-ed in the German newspaper, Süddeutsche Zeitung, which commented on this interview under the headline, “Putin hugs Europe.”
The contents of the op-ed were quite remarkable. Putin said that the lesson to be drawn from the severest economic crisis of the world economy in eight decades was the need for Russia to work more closely with the European Union. “We propose the creation of a harmonious economic community stretching from Lisbon to Vladivostok.” He said that “in the future, we could even consider a free trade zone or even more advanced forms of integration.” He suggested that such a continental market would be worth trillions of Euros.
Putin suggested that the EU and Russia needed to work closer together in the fields of industry and energy. He said that they should consider “what we can do to enable a new wave of industrialization on the European continent.” He mentioned such fields as shipbuilding, the airplane and automobile industries, environmental technologies, pharmaceuticals, nuclear energy, and logistics. He called for common undertakings by European and Russian entrepreneurs.
In the field of energy supplies, Putin called for “active exchanges.” It was necessary, he said, to work together at “all phases of the technological value creation chain – from the uncovering of demand for energy resources up to the delivery to the consumer.” Thereupon, Russia and the EU can move forward to the elimination of visas which would manifest “not the end but the beginning of a true integration of Russia and the EU.”
When Putin arrived in Germany he got a warm reception from some leading German bankers and industrialists. He spoke to them as his “friends,” and in return the CEO of Siemens said, “We are at home in Russia.” He said that “Russia was a clear example of how the emerging nations are giving an impulse to growth in the world economy.”
Putin continued his “charm offensive” with the German economic elite. He suggested they stood together on currency questions. “We need a new multipolarity in the currency system. We must break the excessive dollar monopoly.” He spoke of the example of the Roman Empire, whose policies led to a 500-year-long economic stagnation. He then gave a strong endorsement to the euro, which he called an important balance to the dollar in the world economy. He suggested the possibility of trade being denominated in rubles and Euros, and not in dollars.
Chancellor Angela Merkel’s response to these proposals was cautious but not negative. Germany’s Foreign Minister, Guido Weterwelle, said that Putin’s proposals show “how close we are in terms of our strategic goals.” The strongest endorsement came from some of Germany’s leading economic managers. Press response in Germany was mixed.
In France, Le Monde noted: “This appeal to economic opening by someone more noted for his nationalist character than his commitment to ideas of free trade is truly innovative. This is all the more the case since the development of industrial cooperation between the two sides has been repeatedly held back for political reasons.”
It should be observed that Putin was not offering a deal to the “West” but rather to “Europe.” It seems a quite specific attempt to encourage a strengthening of ties with Europe at the expense of the United States. While this is not entirely new in terms of Russia’s geopolitical stance, it has up to now not been stated so publicly and so boldly. It should be noted too that Putin has given a strong endorsement to the euro at a time when the euro is in need of some political reinforcement. Note too that Putin is not talking of remaining merely or even principally an energy-exporter to Europe. Putin is talking of a new wave of industrialization in which Russia will participate fully.
This open diplomacy by Putin should probably worry U.S. leaders more than the modest revelations of Wikileaks.
Shall We Discuss Poverty?
For the fifteen to twenty years that the Washington Consensus dominated the discourse in the world-system (circa 1975-1995), poverty was a taboo word, even as it was increasing by leaps and bounds. We were all told that the only thing that mattered was economic growth, and that the only road to economic growth was to let the “market” prevail without any “statist” interference – except, of course, that of the International Monetary Fund (IMF) and the U.S. Treasury.
Great Britain’s Mrs. Thatcher famously gave us the slogan, “There is No Alternative” (TINA), by which she meant there was no alternative for any state other than the United States and, I suppose, the United Kingdom. The benighted countries of the global South just had to abandon their naive pretensions at controlling their own fate. If they did, they would one day (but who could say when?) be rewarded with growth. If they did not, they were doomed to – dare I say it? – poverty.
The glory days of the Washington Consensus are long since over. Things did not improve for most people in the global South – quite the opposite – and rebellion was in the air. The neo-Zapatistas rose up in Chiapas in 1994. The social movements brought the World Trade Organization’s meeting in Seattle to a halt in 1999 (from which it has never recovered). And the World Social Forum began its expansive life in Porto Alegre in 2001.
When the so-called Asian financial crisis exploded in 1997, causing vast economic damage in east and southeast Asia, and spreading to Russia, Brazil, and Argentina, the IMF pulled out of its pockets its threadbare set of demands for these countries, if they wanted any help. Malaysia had the courage to say no thank you, and Malaysia recovered the most swiftly. Argentina was even bolder, offering to pay its debts at about 30 cents on the dollar (or else nothing).
Indonesia however buckled under, and soon thereafter the long-standing, seemingly very stable dictatorship of Suharto was ended by a popular uprising. At the time, no less a person than Henry Kissinger bellowed at the IMF, saying in effect how stupid can you be? It was more important for world capitalism and the United States to keep a friendly dictator in power in Indonesia than to have a country follow the rules of the Washington Consensus. In a memorable 1998 op-ed, Kissinger said that the IMF is acting “like a doctor specializing in measles [who] tries to cure every illness with one remedy.”
First the World Bank and then the IMF learned their lesson. Forcing governments to accept neo-liberal formulas as their policy (and as the price for financial assistance when their state budgets are out of kilter) can have nasty political consequences. It turns out that there are alternatives after all: People can revolt.
When the next bubble burst and the world entered what is now referred to as the financial crisis of 2007 or 2008, the IMF became even more attuned to those unpleasant masses who don’t know their place. And lo and behold, the IMF discovered “poverty.” They not only discovered poverty, but they set out to provide programs to “reduce” the amount of poverty in the global South. It is worth understanding their logic.
The IMF publishes a sleek quarterly magazine called Finance & Development. It is not written for professional economists but for the wider audience of policymakers, journalists, and entrepreneurs. The September 2010 issue features an article by Rodney Ramcharan whose title tells it all: “Inequality Is Untenable.”
Rodney Ramcharan is a “Senior Economist” in the IMF’s African Department. He tells us – the new IMF line – that “economic policies that simply focus on average growth rates could be dangerously naive.” In the global South, high inequality can “limit growth-enhancing physical and human capital investments and increase calls for possibly inefficient redistribution.” But even worse, high inequality “giv[es] the rich a relatively greater voice than the less homogeneous majority.” And this in turn “can further skew the income distribution and ossify the political system, leading to even graver political and economic consequences in the long run.”
It seems the IMF has finally heard Kissinger. They have got to worry about both the unwashed masses, especially in countries of high inequality, and of their elites, who also delay “progress” because they want to maintain their hold on unskilled labor.
Has the IMF suddenly become the voice of the world’s left? Don’t be silly. What the IMF wants, as do the world’s more sophisticated capitalists, is a more stable system in which their market interests prevail. This requires twisting the arms of elites in the global South (and even in the global North) to give up a little of their ill-gotten gains in “poverty” programs that will appease enough of the ever-expanding poor to calm their thoughts of rebellion.
It may be too late for this new strategy to work. The chaotic fluctuations are so very great. And “untenable inequality” is growing daily. But the IMF and those whose interests it represents are not going to stop trying.
Brazilian and U.S. Elections: Opposite Outcomes
On October 31, President Luis Inacio “Lula” da Silva won a sweeping victory in the Brazilian elections. On November 2, President Barack Obama was soundly defeated in the U.S. elections. The curious thing is that neither one of them was standing in the elections. In Brazil, Lula had had two terms, the maximum allowed, and was supporting Dilma Rousseff as his successor. In the United States, the 2010 elections were midterm legislative elections, not a presidential election.
There are some striking similarities in the two men and the two political situations. Lula was elected president of Brazil in 2002 as the candidate of hope and change. Obama was elected president of the United States in 2008 as the candidate of hope and change.
Both men were outsiders in terms of the traditional political processes of their countries. Lula was the first president of working-class background and of little formal education. Obama was the first African-American president of his country.
In their campaigns, both rallied large-scale popular support. In Lula’s case, this was not his first, but his third attempt to become president. He had been a trade-union leader and the leader of a workers’ party, the Partido dos Trabalhadores (PT). Obama has been a community organizer and a senator with a very left (“liberal”) voting record in the legislature. Both received support from militants in social movements and appealed particularly to young voters. Both emphasized the misdeeds of the previous president in their country – Fernando Henrique Cardoso in the case of Brazil and George W. Bush in the case of the United States – and in both cases their election was seen as a repudiation of the policies of the previous president.
In neither case did the newly-elected president have a clear path in the legislature. In the Brazilian case, the electoral system led to a legislature with multiple parties and the PT had no more than a quarter of the seats. In the U.S. case, the rules of the U.S. Senate allowed the opposition party to block or force major concessions in any legislation the U.S. president wanted to see enacted. Both men felt they had to make political compromises.
In both cases, a major fear of the newly-elected president was that the already difficult economic situation of their countries would turn to disaster. Lula feared runaway inflation and runaway investors. Obama feared collapse of the banks and runaway unemployment. The way each responded to these fears was to turn to a relatively conservative (“neoliberal”) economic approach and the appointment of relatively conservative people in the key economic positions of their administration.
This almost immediate “neoliberal” approach dismayed a large part of their electoral base. In each case, the two men sought to reassure their more left supporters that this “neoliberal” approach was essential but transitional, and that they would see that eventually their hopes for more fundamental change would be realized.
These assurances were taken with increasing skepticism and public dissent by these supporters, and particularly by leading left intellectuals and leaders of social movements. In the Brazilian case, some of them publicly resigned from the PT and threw their support to smaller left-wing parties. The response of both Lula and Obama was to point to various kinds of programs they had put into effect which were intended to improve the lot of the poorer parts of the population, such as the campaign against hunger in the case of Brazil and the new health legislation in the case of the United States. The skeptics pointed in each case to the important benefits that had accrued to the wealthier segments of their countries.
When, however, the actual elections took place, many of the left skeptics returned to the fold. In Brazil, a group of very prominent left intellectuals issued a public appeal to vote for Dilma Rousseff 0n the grounds that her opponent would wreak disaster for Brazil. A similar position was taken by the most important social movement, the Movimento dos Trabalhadores Sem Terra (MST), which had been badly let down by Lula but nonetheless thought that things would be still worse if Rousseff were not elected.
In the U.S. case, intellectuals who had supported the third-party candidacy of Ralph Nader in 2000 because they felt that there was no significant difference between Al Gore and George W. Bush publicly repented of this approach and argued for supporting Democrats in the legislative elections. So did leaders of social movements – among African-Americans, Latinos, and gays – despite their public disappointment with the limited fulfillment of Obama’s promises.
All this seems remarkably similar, yet the outcome could not have been more different. Rousseff won handily in Brazil and Obama, in his own words, received a “shellacking.” Why? It could not be clearer. There was one enormous difference in the two situations. Brazil’s economic situation had markedly improved in the past few years, and the U.S. economic situation had become markedly worse. There could not have been a clearer demonstration of the Carville thesis: “It’s the economy, stupid.”
It was not Obama’s “centrism” that explains why voters turned against him. Lula has been every bit as “centrist” in his politics. It was not Obama’s lack of charisma. He had seemed very “charismatic” in 2008. Lula was popular because things seemed to be going well. And Obama was unpopular because they seemed to be going badly. It is not that one sold out and the other did not. It was not a question of their true political convictions. Sometimes, the overall structural situation overwhelms the abilities of talented politicians to do much about them.