BOOK REVIEW
The
Passage to a New World
A New Democracy: Alternatives to a Bankrupt World Order
By Harry Shutt
London and New York: Zed Books, 2001; Manila: Ibon;
176 ++ pages
The free market myth is
being peddled to erase the damages wrought by the “speculative conspiracy
theory” and this is coupled by the usefulness of “political chaos and
international or ethnic conflict” to further legitimize the imposition of
economic and political control.
By JPaul Manzanilla
Bulatlat
Books on political
economy being published nowadays on the whole summon radical departures
from the temper of international relations. Scholars, activists,
academicians and technocrats, however disparate their partisanship,
somehow agree that the current global political and economic situation is
no longer tenable and must be transformed. It is in this light that Harry
Shutt’s A New Democracy: Alternatives to a Bankrupt World Order
participates in the debate.
The book opens with a
prophesied doom: the crumbling of civil order, soaring number of people
seeking asylum and the emergence of a growing underclass. What this
horrible condition secretes is the “synthetic euphoria over
globalization,” the triumphant call for the new economy that promises to
break against all odds of present-day misery. Consider: in the most
industrialized countries, the deteriorating state of public services, fall
of living standards and the negligible value of pension funds; in poor
countries of the Third World and
the former Soviet bloc, the massive destabilization of inflows and
outflows of capital.
Who calls the shot in
this global downturn? It is not the imperial powers of yesterday but a
worldwide alliance of economic interests protected by states that is
culpable for this poverty. Shutt describes Western leaders as “[managing]
to shut themselves off from reality by surrounding themselves with
advisers – and packing the media with commentators – who tell them nothing
they do not want to hear.” Yet the actions of these same leaders who
trumpet human rights and democratic values call for the incompatibility of
imperialism with democracy.
The first chapter on
The Waning of Imperialism points to the successive upheavals of
nations against colonial masters, a perpetual struggle of asserting
sovereignty largely based on Enlightenment values of freedom and
independence. In Asia and Africa, the rise of national consciousness and
the principle of national self-determination give birth to nation-states
of, by and for, in the words of the African revolutionary Frantz Fanon,
the “wretched of the earth.” Before, the League of Nations was limited on
the provision that colonized peoples are sort of a protectorate of their
colonial masters, indeed, the absence of commitment to the ending of
colonial rule. Now, the United Nations enshrines the sovereign equality of
all nations and the rights of citizens to elect their own governments. But
this is sharply undermined in that this international organization’s most
powerful body, the Security Council, privileges five permanent
member-countries with veto power on the global state of affairs.
Paper tiger
Alas, sovereignty is
a paper tiger once we critically examine that member-states are uneven in
the distribution of wealth and, with it, power! With this are the horrors
of the Cold War showing the painful consequences to people of brutal
undemocratic governance – the betrayal of the so-called socialist cause by
their own leaders. For most of the UN members, a genuine form of
representative democracy remains a dream to be fulfilled as examples of
this are being subverted in the “more mature” democracies.
The problem for the
Axis and Allied powers after the Second World War is how to sustain
economic strength crucial to their political consensus and in support of
the superpower status of the United States. Because most of the peoples of
the world can only cower in fear in the midst of the epochal battle of the
United States and the Soviet Union,
they had to decide on what terms and ideologies to favor. But the
protagonists in this conflict are both imperialist in their thrusts and
hence, the Cold War as an excuse no longer became credible. Poorer and
weaker countries gained their own historical victories in the examples of
the Vietnamese triumph and the Nicaraguan government’s successful
prosecution of the undeclared war of the United States in the
International Court of Justice in 1984. As a damage control measure, the
Carter administration put more emphasis on the promotion of human rights
in foreign policy. We can still see this former president touring the
world and building homes and brokering peace. Are they for real social
advocacy or a propagandistic tool of the myths of imperialist-led
democracy?
A more subtle
approach is the present media frenzy over the Middle East – its histories,
its peoples, its cultures. And there is no finer word than terrorism.
The projection of Islamic fundamentalism as the scourge that afflicts the
civilized and free peoples of the world reaps the accusation of religious
and even racial discrimination. It effaces the contradictory position of
terrorism’s “opponents;” for terrorism as a practice is based on various
beliefs, and in the case of national liberation movements, supported by
covert and open operations of the
US through the Central Intelligence
Agency and its armed might dispersed all throughout the world. We can only
protest in loathing against the US’
refusal to support the International Criminal Court even though an
overwhelming number of states voted to establish it.
To this day we wonder
at how the US government audaciously topple enemy states while supporting
undemocratic regimes, most notably the Kingdom of
Saudi Arabia
that brazenly denies touted modern liberal values to its subjects.
Questions on the establishment of a nation-state for the Palestinian
people languish, owing to the tight-rope balancing act of collaboration
and compromise between “democratic” Israel and “authoritarian” Arab
states. In addition, the US government did not utter an official protest
against the Tiananmen Massacre in China when its government has become
a favorable partner in capitalist investments. Today, the most common
though overlooked method is the denial of official development or loan
finance. Tactics vary, from “offering material and propaganda support to a
favored party within the ‘democratic’ process of individual states and the
usual panoply of bribes to political leaders in return for their support
for US interests.”
Traditional imperialism
Shutt’s main thesis
on this discussion is that traditional imperialism is “simply incompatible
with any interpretation of the principles of liberal democracy.” We should
also depart from traditional historical analysis that pins international
relations solely on the “secular rise and fall of empires or attempts to
maintain a balance of power.”
For the author, the
global downturn has four components: declining economic growth rates,
intensifying competition for markets and shrinking outlets for
investments, rising unemployment and public indebtedness, recurrent
inflation and increased currency instability. This generates a resistance
to market forces driven by the “fear of the political consequences of
slump” and the “desire of big business to avoid major financial losses and
corporate collapses.” However the measures being implemented do not help
as there is a steady “intensifying squeeze” on public expenditure hitting
social welfare benefits, this kind of solution fails to tap the vein of
the crisis flow which is the rampant profit-making facilitated by the
breaking of barriers of capital, goods and services across nation-states
of the world. This borderless word or the “rolling back of the frontiers
of the state” pushes privatization of state-owned enterprises and cuts in
taxation
The struggle to
contain global crisis inhibits the effective utilization of state powers
in the use of greater tax incentives to investment, denying the use of
profits for public interests, and the greater relaxation of controls on
financial markets reaching the point of inviting manipulation, as what
happened in the Southeast Asian crisis of 1997. In the end, governments
scamper to rescue ailing corporations especially when they are considered
too big to fail. There are also two new long-term constraints for the
global market economy: the information technology (no real investment in
terms of consumer demand and employment) and the environmental constraints
to growth.
What fuels the drive
to imperial power is the expectation of economic gain. In the current
rules of trade, extreme orthodoxy and liberalization persist in the manner
of structural adjustment or “shock therapy.” The free market myth is being
peddled to erase the damages wrought by what the author calls the
“speculative conspiracy theory” and this is coupled by the usefulness of
“political chaos and international or ethnic conflict” to further
legitimize the imposition of economic and political control. No matter the
calamitous implications of neo-liberalism there is a “refusal to accept a
greater degree of collectivism” and the ostensible “extreme desperation on
the part of the ruling elite to cling to power. This is cogently expressed
in the Philippine political dispensation where the various factions of
competing comprador and landlord elite are only functional in offering an
assortment of economic palliatives that further pauperize the citizens
such as the extortion of additional taxes from the populace, faithful
adherence to the payment of foreign debt inflected by the bayanihan
spirit which blights traditional Filipino collectivist spirit. Even the
leading global financial institutions fail to coordinate their actions and
are victimized by criminal elements taking on a parasitical and
cannibalistic trait on itself a profiteering industry.
There is accordingly
the convergence of two crises: imperialist political control and the
capitalist economic system. It is to be stressed at this point that the
imperialist crisis stems from the capitalist free market-oriented model
that logically demolishes all stumbling blocks to profit.
Persistent untruth
A persistent untruth
awaiting the most rigorous of our critique is that “the interests of
economic welfare are best served by privately owned corporations” as
explained by the free market competition that pushes prices of goods and
services down and impels the raising of quality. What this selling point
precludes is the monopolistic character of private enterprises that inform
the homogenizing character of what is to be bought and, more importantly,
the lack of public accountability of these profit-making formations. Shutt
enumerates the problem with competition: market uncertainty – supply
usually surpasses demand, the use of cost-reducing technology and the
improvement of quality and design by competitors reduce sales
considerably, predatory pricing and buying out of competitors; imperfect
access to information; wasteful duplication of capacity and; financial
destabilization. After the chaos caused by all these, state intervention
is, argues Shutt, inevitable. A particular regulation is on “where it is
deemed appropriate to provide a public subsidy of private profit in order
to keep an enterprise in business it must also require the beneficiary
company to adhere to specific commitments as a condition of support –
whether in terms of investment, employment or price levels.” Western
democracy as a key to solving the problem is itself battered by salient
flaws tied to the capitalist enterprise like the financing of political
parties by private corporations, effective control of the press and mass
media. We are reminded at this moment by the media company ABS-CBN that,
in the last election, supported the incumbent president by lending its
talents in the image campaign and defended anti-people policies in the
most abominable fashion.
Belying the free
market promise of higher living standards is the global oversupply of
labor. Generally, unemployed people do not register unless they can claim
welfare benefits and in Third World states, data are not compiled at all.
This has a social bearing in terms of its inverse relation to the prison
population: the more number of people not working decently, the higher the
number of inmates in prisons. It is to be avoided in the critical project
that industrialized and capitalist countries are wont to regulate at all,
as for Shutt, there is a “de facto rejection of free trade” in the
situations of Asian economic tigers like South Korea that combines “both
strong protection against imports and heavy subsidization of exports.”
Even in terms of the vaunted level playing field, this is a “fantasy”
because the rich industrialized countries already have a competitive
advantage. A patent case in point of protectionism is the agriculture
industry which the US wants to exempt from the General Agreement on
Tariffs and Trade (GATT) and, with the OECD countries, bailing their
farmers in events of economic failure. The anarchic deregulation
compounding the whole world ravages economies with the unhampered and
rapid movements of capital and profits across nation-states, as what
happened in Thailand and Mexico in the 1990s. In place of all these, the
author proposes “more cooperation, less competition,” “protection of
weaker economies” and “economic integration” based on non-discriminatory
free trade.”
To search for a new
model in solving the crisis of underdevelopment, Shutt calls forth to
discard the “bankruptcy of conventional models of development.” The
developmentalist impulse is a farce considering that transfers of aid
“have been forced to concede that it has not only failed to generate
self-sustaining growth in developing countries but has too often been a
stimulus to waste, corruption and unserviceable debt burdens.” To be
independent, we must be interdependent for us to build a binding structure
between rich and poor countries, like giving grants rather than loans for
the poorest countries of the world. Opposing the total transformation of
the neo-colonial paradigm are the local elites which in the Philippines
there was, as pointed out by the author, “the emergence of a comprador
bourgeoisie from the more or less feudal landowning elite,” a rather
adaptive course of ensuring the hold on economic and political power. A
new international order should be based on the “principles of democratic
accountability and the rule of law” that has two brands of integration for
nation-states: the creation of regional economic blocs and more structured
relations with industrialized donor countries.
Collectivist framework
To replace the free
market, a collectivist framework that has a proper balance between the
interests of the public and private sectors and which “puts capital in its
proper place” must take hold. There should be instability instead of out
of hand growth, a cap on the making of profits and the recognition that
“holding down corporate profits is broadly in the public interest.”
Reasoning the new economics is a “post-capitalist ideology” with the
following attributes: conscious political choice replacing consumer
sovereignty, a new economic calculus revaluing costs and benefits of the
commercial market, and a general bias in favor of greater equality of
personal income and wealth. On a political level, restrictions on the
funding of political parties, a limit on patronage and the delimiting of
the ownership of mass media are to be imposed. Third World countries
should be prioritized based on the goal of greater self-sufficiency. Even
discrimination is a need on the concerns of employment, environmental
protection and the corporate behavior as a whole.
What is uncanny in
the post-Word War II order – when all peoples should have nation states at
long last – is the disorder in that sovereignty is not inviolate after
all. This is concretely manifested in the absence or lack of economic
independence for most countries. There is also the “ambivalence on human
rights” on which the integrity of the nation rests. Unilateralism takes
its toll by means of military, judicial and economic interventions. A
reform of the United Nations should not be a process long in coming; from
being an “essentially passive” international body, the UN must be
transformed into a “more cohesive and accountable international
organization with sufficient authority to fulfill the more complex role
which today’s world demands.” In lieu of regional blocs, global unity
should reign supreme, grounded on a new UN which has “legitimacy to assume
administrative responsibility, on a basis of democratic accountability to
the population affected, for any territory whose government was unable to
discharge its functions.” Shutt designates the European Union as an
alternative case in the drive toward integration, arguing that it has a
promise in its balancing acts by way of the link between economics and
politics, the need for representative government and a common currency.
Genuine freedom
The final chapter on
The Path to Democracy is a trajectory that, taking the most
instructive lessons of the past, ushers all of us to a world where genuine
freedom reigns; indeed, the recognition and satisfaction of human needs
and aspirations. In a crisis of credibility, the power-holders are
relentlessly attacked by the power of the people in carving out more
representative and democratic spaces in the iniquitous status quo, while
constructing a strategic gain for multisectoral interests. Contradictions
of and in the Third World are to be resolved by resisting the impositions
of foreign institutions on local policy, ensuring the transparency on
party fund sources, rejecting the “minimalist state” paradigm that exacts
the gravest exploitation by weakening governmental powers and the “drastic
revision of the rights and functions of corporations as well as the
institutions of state.” Economic democracy should also take cognizance of
the perils of involving civil society and other stakeholders in
decision-making, for this is just an empty gesture as the mentioned
formations are legally powerless and customarily marginalized. Corporate
governance must be subjected to “effective public accountability” and the
“effective separation of control from ownership.” The “essence of a
post-capitalist economy would,” for the author, “be the substitution of
conscious political choice for the dictates of blindly destructive or
dishonestly manipulated market forces.” In making governments more
representative and accountable: the following measures should be ensured:
restricting the influence of moneyed interests, access to the media for
divergent opinions, empowering the voters, limiting patronage and holding
officials to account.
Shutt’s effort is an
intellectual and scholarly intervention requiring the most demanding of
our praxis. For progressive government officials and policy makers, the
recognition that things are not fair and well at the least, and something
must be done. For social activists, the poor and majority of the people,
all of us, that we deserve a far better world than the present and things
ought to change. Changing this rests on our hands. Not just a collective
responsibility but a bad present passing. To say the least, in the light
of our struggle and through the darkness of history, there is a bright
future whose process should not be long in coming. Bulatlat
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