In May 1998, Indonesian mobs swarmed through the streets of Jakarta, looting
and torching more than 5,000 ethnic Chinese shops and homes. A hundred and
fifty Chinese women were gang-raped and more than 2,000 people died. In the
months that followed, anti-Chinese hate-mongering and violence spread
throughout Indonesia's cities. The explosion of rage can be traced to an
unlikely source: the unrestrained combination of democracy and free markets
- the very prescription wealthy democracies have promoted for healing the
ills of underdevelopment. How did things go so wrong?
During the 80s and 90s, Indonesia's aggressive shift to free-market policies
allowed the Chinese minority, just 3% of the population, to take control of
70% of the private economy. When Indonesians ousted General Suharto in 1998,
the poor majority rose up against the Chinese minority and against markets.
The democratic elections that abruptly followed 30 years of autocratic rule
were rife with ethnic scapegoating by indigenous politicians and calls for
the confiscation of Chinese wealth. Today, the Indonesian government sits on
$58bn worth of nationalised assets, almost all formerly owned by Chinese
tycoons. These once productive assets lie stagnant, while unemployment and
poverty deepen, making Indonesia a breeding ground for extremist movements.
. . .
But the most formidable problem the developing world faces is one the west
has little experience with. It's the market-dominant minority - ethnic
minorities which - for widely varying reasons - tend under market conditions
to dominate economically impoverished "indigenous" majorities. They are the
Chinese in south-east Asia; Indians in east Africa, Fiji and parts of the
Caribbean; Lebanese in west Africa; Jews in post-communist Russia; and
whites in Zimbabwe, South Africa, Bolivia and Ecuador, to name just a few.
In free-market environments, these minorities, together with foreign
investors, tend to accumulate starkly disproportionate wealth, fuelling
ethnic envy and resentment among the poor majorities. . . .
Meanwhile, an analogous dynamic is playing out at the worldwide level. In
the past 20 years, the US has come to be perceived as a global
market-dominant minority, wielding wildly disproportionate economic power. .
. .
[Today's peddlers of "Globalization" would have us believe that inviting
foreign investments is the mantra that can deliver the third world from
poverty and backwardness. . . . Wasn't the East India Company the ultimate
in foreign investments?
To quote what Nehru wrote on February 28, 1933, "In this way, the American
capitalists gained effective control of these smaller countries of the south
and ran their banks, railways, and mines, and exploited them to their own
advantage. Even in the larger countries of Latin America they had great
influence because of their investments and money control. That is to say,
the United States annexed the wealth, or a great part of it, of these
countries. Now, this is worth noting, as it is a new kind of empire, the
modern type of empire. It is invisible and economic, and exploits and
dominates without any obvious outward signs. The South American republics
are politically and internationally free and independent. On the map they
are huge countries, and there is nothing to show that they are not free in
any way. And yet most of them are dominated completely by the United States."
Most of us think of empires, like the British in India, and we imagine that
if the British were not in actual political control of India, India would be
free. But this type of empire is already passing away, and giving way to a
more advanced and perfected type. This latest kind of empire does not annex
even the land; it only annexes the wealth or the wealth producing elements
in the country. By doing so it can exploit the country fully to its own
advantage and can largely control it, and at the same time has to shoulder
no responsibility for governing and repressing that country. In effect both
the land and the people living there are dominated and largely controlled
with the least amount of trouble.--Review by Anand Nair of Jawaharlal Nehru,
"Glimpses
of World History," Oxford University Press (January 1, 1990)]
Graham Hancock, "Lords of
Poverty: The Power, Prestige, and Corruption of the International Aid Business,"
Atlantic Monthly Press; Reprint edition (January 10, 1994)
[The truth: Free trade is the serial killer of American manufacturing and
the trojan horse of world governement. It is the primrose path to the loss
of economic independence and national sovereignty. Free trade is a bright,
shining lie.--Patrick J. Buchanan, "Where the Right Went Wrong: How Neoconservatives
Subverted the Reagan Revolution and Hijacked the Bush Presidency," Thomas
Dunne Books (September 1, 2004), p. 152-174]
[John Perkins should know about economic hit men - he was covertly recruited
by the U.S. National Security Agency to be one. For years, he worked for an
international consulting firm where his job was to convince underdeveloped
countries to accept enormous loans, much larger than what was really needed,
for infrastructure development - and to make sure that the development
projects were then contracted to U. S. multinationals. Once these countries
were saddled with huge debts, the American government and the international
aid agencies allied with it were able, by dictating repayment terms, to
essentially control their economies. It was not unlike the way a loan shark
operates - and Perkins and his colleagues didn't shun this kind of unsavory
association. In fact, they even referred to themselves as "economic hit
men."--John Perkins, "Confessions
of an Economic Hit Man: How the U.S. Uses Globalization to
Cheat Poor Countries Out of Trillions," Berrett-Koehler Publishers (November 9, 2004)]
[. . . the National Endowment for Democracy (NED), and its primary arms,
the National Democratic Institute for International Affairs (NDI) and
International Republican Institute (IRI), played a central role. The NED
was established by the Reagan Administration in 1983, to do overtly, what
the CIA had done covertly, in the words of one its legislative drafters,
Allen Weinstein.
The Cold War propaganda and operations center, Freedom House , now chaired
by former CIA director James Woolsey, has also been involved, as were
billionaire George Soros' foundations, whose donations always dovetail those
of the NED.--Jonathan Mowat, "Washington's New
World Order 'Democratization' Template," Centre for Research on
Globalisation, February 9, 2005]
[This takes us back to the essential truth that the problem is capitalism.
The only solution, as difficult as this may be to contemplate at the present
time, is socialism; socialism, that is, as the socialist movement always
meant it to be: revolutionary, democratic, egalitatarian, environmental,
necessitating mass participation and mobilization. The difficulties in
creating such a society are immense. But "immense," as Daniel Singer once
said, "is not synonymous with impossible." If we want a stable, just,
egalitarian, sustainable world in which the "free development of each is the
condition for the free development of all" there is no alternative but a
long march to socialism propelled forward by a growing socialist
movement.--John Bellamy Foster, "The End of Rational
Capitalism," Monthly Review, March 2005]
[To justify the robber baron culture, America's business educators and
economists falsely cite their demigod of laissez-faire market economics,
Adam Smith. Little do they know that Adam Smith in fact scathingly
castigated Bush's type of government: business collusion and unfair taxes,
Wal-Mart's exploitations of labor and communities, and robber barons'
hubris. Nowhere in his 900-page book, The Wealth of Nations, does Smith even
imply that those who knowingly harm others and society in their pursuit of
personal greed also benefit their society. He rejects the notion that a
corporation exists to make money without ethical constraints.--Yoshi
Tsurumi, "Hail
to the Robber Baron?," Harvard Crimson, April 7, 2005]
[From 1950 to 1970, for example, for every additional dollar earned by the
bottom 90 percent, those in the top 0.01 percent earned an additional $162,
according to the Times analysis. From 1990 to 2002, for every extra dollar
earned by those in the bottom 90 percent, each taxpayer at the top brought
in an extra $18,000.--David Cay Johnston "Richest
Are Leaving Even the Rich Far Behind," New York Times, June 5, 2005]
[The west may believe it is building a safer world by opening up markets,
imposing sanctions and intervening in conflicts. In reality it is creating a
gangsters' paradise . . . once organised crime has begun the process known
as "state capture", through which it influences policy, it is very difficult
to reverse the process.--Misha Glenny, "Mob rule," The New
Statesman, June 6, 2005]
[Before the US proconsul Paul Bremer left Baghdad, he enacted 100 orders as
chief of the occupation authority in Iraq. Perhaps the most infamous was
Order 39 which decreed that 200 Iraqi state companies would be privatised,
that foreign companies could have complete control of Iraqi banks, factories
and mines, and that these companies could transfer all of their profits out
of Iraq. The "reconstruction" of the country amounts in effect to wholesale
privatisation of the economy and is little short of economic
colonisation.--Michael Meacher, "My
sadness at the privatisation of Iraq," The Times, August 12, 2005]
[Indeed, the real debate on globalization is, ultimately, not about the
efficiency of markets, nor about the importance of modern technology.
The debate rather is about severe asymmetries of power, for which there is
much less tolerance now than in the world that emerged at the end of the
Second World War.--Amartya Sen, "The
Argumentative Indian," Farrar, Straus and Giroux, October 12, 2005]
William Easterly, "The
White Man's Burden: Why the West's Efforts to Aid the Rest Have Done
So Much Ill and So Little Good," Penguin Press HC (March 16, 2006)
[Adel Abdel Mahdi . . . is the person who has most aggressively pushed their
agenda for a new oil law in Iraq, which would open up Iraq's oil sector, the
vast majority of Iraq's oil sector, to private foreign corporate
investment.--Antonia Juhasz, "The Bush
Agenda: Invading the World, One Economy at a Time," Regan Books, May 1,
2006]
[All too often, the "free market" is merely organized interests pulling
political strings behind ideological cover.--Paul Craig Roberts, "John Kenneth
Galbraith, a Great American," counterpunch.org, May 3, 2006]
VIDEO and TRANSCRIPT: Joseph E. Stiglitz, "Making Globalization Work,"
Center for Global Development, September 27, 2006
[Neoclassical idiocies persuaded many economists that market forces would
create a robust post-Soviet economy in Russia (corrupt gangster economies do
not exist in neoclassical theory). Neoclassical ideas favouring unfettered
market forces may determine whether Britain adopts the euro, how we run our
schools, hospitals and welfare system. If mainstream economic theory is
fundamentally flawed, we are no better than doctors diagnosing with
astrology.--Philip Ball, "Baroque fantasies of a peculiar science," Financial Times,
October 29, 2006]
[The World Bank's use of questionable evidence to "proselytise" on behalf of
its development policies has been sharply criticised by the first big
external audit of the bank's use of research.--Eoin Callan, "WB 'uses doubtful evidence to push policies'," Financial Times,
December 21, 2006]
[Details behind the strategy I helped engineer - the Saudi Arabian
Money-laundering Affair (SAMA) - are provided in Confessions of an Economic
Hit Man. In summary, as far as the media was concerned, the House of Saud
agreed to three important conditions; it would: I) invest a large portIon of
its petrodollars in U.S. government securities; 2) allow the U.S. Treasury
Department to use the trillions of dollars in interest from these securities
to hire U.S. corporations to westernize Saudi Arabia; and 3) maintain the
price of oil within limits acceptable to the corporatocracy. For its part,
the U.S. government promised to keep the Saud family in power.
There was an additional agreement, one that made few headlines but was
crucial to the corporatocracy's need to maintain the dollar as the standard
global currency. Saudi Arabia committed to trading oil exclusively in U.S.
dollars. With the scratch of a pen the dollar's sovereignty was
reestablished. Oil replaced gold as the measure of a currency's value.--John
Perkins, "The
Secret History of the American Empire: Economic Hit Men, Jackals,
and the Truth about Global Corruption," Dutton Adult, June 5, 2007]
[Iraqi officials say that, last year, they wanted to diversify their holdings
out of the dollar, as it depreciated, into other assets, such as the euro,
more likely to hold their value. This was vetoed by the US Treasury because
American officials feared it would show lack of confidence in the
dollar.--Patrick Cockburn, "US issues
threat to Iraq's $50bn foreign reserves in military deal,"
Independent, June 6, 2008]
[This is the third time in 100 years that support for taken-for-granted
economic ideas has crumbled. The Great Depression discredited the radical
laissez-faire doctrines of the Coolidge era. Stagflation in the 1970s and
early '80s undermined New Deal ideas and called forth a rebirth of radical
free-market notions. What's becoming the Panic of 2008 will mean an end to
the latest Capital Rules era.--E. J. Dionne, "The Death of Reaganomics," truthdig.com, July 10, 2008]
[Why were the experts so wrong? They were wrong mostly because economics is
an underdeveloped discipline dominated by pure, unabashed ideology. The
dominant school of economic thought during the Great Depression was, and
remains to this day, the "neoclassical" or marginalist school. But in the
"neoclassical" world there is no such thing as a crisis. This is not the
real world in which we live. It is a classless world, consisting of
"consumers" and "producers." It is a harmonious world modeled mostly after
mathematical physics. In such a world there is no history; there is no past,
no present and no future. Nothing of consequence ever happens in this world,
especially no catastrophic event. This unreal, insipid and a-historical
marginalist world should have been abandoned a long time ago, particularly
after the Great Depression. Yet, its seemingly mathematical elegance
combined with its unadulterated and brazen defense of capitalism, or "free
market" as its proponents prefer to call it, has kept it alive. Of course,
since the Great Depression the "neoclassical" theory has been somewhat
amended by a few ideas from the British aristocrat John Maynard Keynes,
ideas that tried to add some elements of reality to the unreal theory. But
the result, the so-called "neoclassical synthesis" or "neo-Keynesianism," is
no more than a hodgepodge of disjointed, unclear and incoherent ideas that
are fed to the students of economic theory under the rubric of "micro" and
"macroeconomics."--Sasan Fayazmanesh, "R.I.P.: The
Experts, 1929-2008," counterpunch.org, November 14, 2008]
[ . . . only 11% of those questioned across 27 countries said that it was
working well.--James Robbins, "Free market
flawed, says survey," BBC News, November 9, 2009]
Sheldon S.
Wolin, "Democracy Incorporated: Managed Democracy and the Specter of
Inverted Totalitarianism," Princeton University Press; (February 1, 2010)
[Our government is not broken; it's been bought out from under us, and on
the right and the left and smack across the vast middle, more and more
Americans doubt representative democracy can survive the corruption of
money.--Bill Moyers and Michael Winship, "What Are We Bid for American Justice?,"
huffingtonpost.com, February 20, 2010]
"The deceptive promise of free trade," DW, June 6, 2018
The Unmaking of India: How the British Impoverished the World's Richest Country,
Odd Compass, July 26, 2023
"The Big Myth: How American Business Taught Us to Loathe Government and Love the Free
Market" . . . written by Naomi Oreskes, a history of science professor at Harvard, and
Erik M. Conway, a historian at Caltech's Jet Propulsion Laboratory, who previously
collaborated on "Merchants of Doubt: How a Handful of Scientists Obscured the Truth on
Issues From Tobacco Smoke to Global Warming."--John Schwarz, "The Big Myth About "Free" Markets That Justified History's Greatest
Heist," theintercept.com, August 4 2023