Chalmers Johnson - The Sorrows of Empire - Militarism, Secrecy, and the End of the Republic

Another abuse of the TRIPS system has come to be called “biopiracy.” In this practice, some firms and universities obtain patents on plants that Third World countries have known about and used, often for centuries, and then extract royalties if these countries want to continue growing them. A classic case was the 1997 attempt of RiceTec, Inc., of Alvin, Texas, to patent a hybrid of India’s basmati rice, which has been harvested for two centuries throughout the subcontinent; so far its patent is good only in the United States and has been universally denounced by the Third World. 31Given these abuses of medical and agricultural technology, even some supporters of the WTO now argue that it would have been better not to include agriculture in its purview and not to extend patent rights over life-forms.

In all, the WTO system that came into being in 1995 is a deceptive but extremely effective tool of economic imperialism wielded by rich nations against poor ones. Within a few years after it was launched, however, the system started to fall apart. Post-September 11, the overemphasis on militarism and unilateralism in the United States has radically weakened the effectiveness of international law, eroding the facade of legality that supports the WTO rules. At the same time, the interests of American militarists and economic globalists have begun to clash, particularly over the rise of an obvious future superpower—China. The economic globalists have invested more heavily in manufacturing in China than in any other place outside the Anglo-American world. The militarists, on the other hand, are already plotting to contain China, militarily if necessary, to decide future global supremacy.

Moreover, as the Bush administration declared “war on terrorism,” it discovered that globalization was as helpful to terrorists trying to launder their money and finance their militants as it was to capitalist speculators. So it began to tighten its grip on, restrict, or close down various channels of American economic interaction with the rest of the world, including access to our universities by students from the Third World. This trend suggests that globalization, at least as it was promoted in the 1990s, may enjoy a rather short life.

Perhaps the first clear sign that globalization and the WTO were in trouble was the Asian financial collapse of 1997. The Clinton administration had put the smaller economies of East Asia under tremendous pressure to accept neoliberalism, particularly to open up their financial sectors to foreign participation. None of the East Asian countries truly believed this was a good idea, and none of them realized what was necessary in the way of bank supervision and regulation of capital markets in order to operate an American-style economy and prevent a crash, but favorable credit ratings and access to markets required cooperation with Washington. Moreover, foreign investors did not care about the outcome; after the U.S. government’s bailout of Mexico in 1994-95, most investors concluded that the U.S.-IMF combination would not permit major defaults in emerging markets, and so capital poured in from all over the world.

Once these smaller nations were loaded up with debt and announced that they would have trouble meeting their repayment schedules, the foreign capital fled even faster than it had arrived. Starting with Thailand, then proceeding to Indonesia and South Korea, most of Asia’s economies suddenly were teetering on the edge of default and had to implore the IMF for help. The IMF imposed draconian reforms as a precondition for its loans, prompting a full-blown political crisis that led to the revolutionary overthrow of the government of Indonesia. A permanent and deep-seated hostility to the IMF, the World Bank, and the United States spread slowly and quietly across East Asia. 32American globalists did everything in their power to divert blame for the East Asian collapse away from its proxies, the IMF and World Bank, and to keep it from tarnishing globalization itself. They argued that the cause of the collapse was Asian corruption, which they termed crony capitalism—meaning insider dealing and a lack of transparency—a phrase originally invented by the Filipinos to describe their own Marcos regime.

One of the few East Asian countries to emerge from the crisis unscathed, indeed in better shape, was Malaysia, and its success in standing up to Washington’s neoliberal “remedies” helped discredit globalization still further. Mahathir Mohamad, the Malaysian prime minister, resisted the demands of the IMF and quickly restored capital controls over his economy. The fraternity of international economists declared that he was committing commercial suicide. He, in turn, accused Western powers and speculators like George Soros of manipulating markets and currencies in order to destroy healthy East Asian economies. This charge greatly irritated Thomas Friedman, a columnist for the New York Times and author of a best-selling paean to globalization, The Lexus and the Olive Tree. Friedman gibed, “Excuse me, Mahathir, but what planet are you living on? You talk about participating in globalization as if it were a choice you had. Globalization isn’t a choice. It’s a reality.... And the most basic truth about globalization is this: No one is in charge.... We all want to believe that someone is in charge and responsible. But the global marketplace today is an Electronic Herd of often anonymous stock, bond, and currency traders and multinational investors, connected by screens and networks.” 33

Two years later in Seattle, to the apoplectic fury of Friedman and other neoliberal apologists, a coalition of nongovernmental organizations began to put names and faces on this electronic herd of politicians and IMF and World Bank officials who were responsible for globalization and who, they argued, ought to be held accountable for its consequences.

Even more disconcerting to Anglo-American globalists, Third World poverty grew faster after the creation of the WTO. Corruption was certainly one factor. For example, Raul Salinas, the brother of the former president of Mexico, siphoned $87 million out of his country through Citibank accounts in New York, Switzerland, and London. Sani Abacha, Nigeria’s former dictator, looted his nation of $110 million, also laundered for him by Citibank. One authority estimates that Carlos Menem, president of Argentina from 1989 to 1999, collected close to $1 billion in bribes during his two terms in office. 34The poor countries’ domestic and administrative structures were another factor; these nations lacked, according to Peru’s de Rivero, “both the middle class and the national market they needed in order to be governable and viable.” 35

In 1999, at the WTO’s third ministerial conference in Seattle, a coalition of people with experience in Third World development programs—environmentalists, trade unionists, anarchists, and some Americans concerned about the role of the “sole remaining superpower”—advanced an alternative explanation for Third World poverty, finally unmasking the imperial, expansionist motives behind neoliberal theory. They emphasized the absence of democracy within the IMF, the World Bank, and the WTO: IMF voting rules, they pointed out, are rigged so that only the richest countries have any influence; the United States reserves the right to name the president of the World Bank; and the WTO takes decisions based on “consensus” whereby any rich nation that does not join the consensus has a de facto veto. 36

The protesters’ demands for reform resonated strongly around the world, and the movement rapidly gained more adherents. By 2002, international meetings of the globalizing powers were drawing protests half a million strong. By and large the globalists, assisted by the big media corporations, chose to vilify the protesters. Prime Minister Tony Blair of Britain declared them to be “anti-democratic hooligans” and a “travelling circus of anarchists.” 37Robert Zoellick, U.S. trade representative in the second Bush administration, compared the protesters to the September 11 terrorists by archly suggesting, “It is inevitable that people will wonder if there are intellectual connections with others who have turned to violence to attack international finance, globalization, and the United States.” 38Writing in the New York Times, Thomas Friedman declared that the Seattle demonstrators were “a Noah’s ark of flat-earth advocates, protectionist trade unions, and yuppies looking for the 1960s fix.” After 9/11, Italian Prime Minister Silvio Berlusconi called them “Talibanized hordes.” 39At the same time, the WTO and the G8 nations took to holding their meetings in ever less accessible places, such as Doha, Qatar, or Kananaskis in the Canadian Rockies. In a cosmetic attempt to improve its image—and in tacit acknowledgment that the ragtag protesters were in fact unnerving the globalists—the IMF changed the name of its “structural adjustment facility” to the more protester-friendly “poverty reduction and growth facility.”