in the Reverse Gear
ROBERTO SAVIO (IDN)
all over the world are now being confronted with a series of hammering
news releases by WikiLeaks' revelations on how U.S. diplomats see the
world and how the financial capital speculates about the weaknesses of
states from Italy to Germany.
While developed countries have been carrying out massive cuts to their
national budgets with sweeping layoffs, governments of the world had
declared -- even before COP 16 ended -- that not much will be
accomplished at the climate change meeting in Cancun, Mexico.
In light of these facts, we should start reflecting on three topics that
are by and large absent from daily media. Is this absence due to the
lack of capacity in the news system? Or is it because these topics are
not part of the political debate, therefore they are not considered
Today we know that the increasingly commercialized system dealing with
information -- which is either sellable or useless, especially due to
the media crisis -- is progressively directed towards events and not
processes, which are being increasingly left out of the information
flow. It's becoming too complex to examine the world, and the analysis
is progressively restricted to a local level.
In other words, newspapers won't write about what is not an 'event'. And
if a certain topic is not part of the political agenda, this new
journalism won't cover it.
Nevertheless, we should start reflecting on three topics that guide us
through the reading of events: the U.S. hangover of post-unilateralism;
social deficit versus fiscal deficit; and the reverting of
Let's start with the easiest topic, the U.S.
It is clearer by the day, even for the American elite, that the United
States is a country in decline. Until now, the majority of citizens have
escaped from this reality by coming up with popular movements like the
Tea Party, composed of white citizens that on the one hand want to
reduce the role of the state so that the citizens can assume control of
their own lives, and on the other, want the return of their country to a
position of world leadership.
As Roger Cohen wrote in the New York Times, this cause is in the
interest of the American people and is for the good of humanity. Obama
will pay a high price for his role as modern mediator in the
readjustment of the U.S. to this new reality. For example, his attempts
to initiate dialogue with Russia or China have been received with great
The U.S. delegation went to Cancun without any support from Congress on
environmental issues and through a tactical twirl, it goes from a
constructive approach to a major controversy with China, an issue which
will paralyze the real debate. Besides, the Republican Party will do
whatever it takes to block the Obama administration in the next two
years. The message is clear: Obama must not win the 2012 elections.
INEBRIATION AND HANGOVER
Meanwhile, the WikiLeaks revelations do not disclose anything new to
specialists. They demonstrate two things: that the U.S. continues to be
convinced that it must govern the world, even if George W. Bush is out
of the picture, and that those who speak with diplomats tell them
whatever they want to hear.
Secretary of State Hillary Clinton made a written petition to gather all
kinds of private data about the political class of several countries,
from their bank accounts to their private activities. No American
government official would ever dream about requesting such information
from American citizens, and the CIA has formal restrictions in this
domain, from none other than the American Congress.
At the same time, not a single document, within the thousands released,
reports any kind of criticism or disagreement with U.S. diplomats from
the representatives of those countries.
Like it or not, the vast majority of U.S. citizens are still living, if
not in inebriation, then at least in the hangover of the unilateral
world in which they have been living since World War II. We are
currently living in an increasingly multilateral world, where not only
China and India but also a series of countries considered in the past as
Third World, from Brazil to Indonesia, begin to have their own voice and
line of action in the world's governance.
If one is not aware of this hangover, it will be extremely difficult to
understand and process relations with the U.S.
When China becomes the most industrialized country in the world, around
2025, the U.S. process of conversion to reality should have been
concluded. The path that this process will take is largely
unpredictable. Today, it's following surreal characters like Sarah Palin,
who has considerably increased her popularity in the public opinion
polls, surpassing Obama.
The second topic is more complex, but easier to summarize, since it's
obvious to everyone. Today, the primary preoccupation of governments is
to react against speculative capital, which is stronger than the
protective measures they can apply. The general opinion is that capital
speculation will continue to persist in countries where the financial
system has structural weaknesses.
Therefore, the conclusion is that the fiscal deficit must be reduced by
cutting the government budget at any cost. Within this pattern, massive
layoffs, cuts on social services, education and health, increasing the
age of retirement and using pension funds to save financial institutions
are seen as modernizing measures and acts of political wisdom.
Nobody, except German Chancellor Angela Merkel in a timid manner, has
mentioned the unprecedented paradox in which we find ourselves today:
speculators who play against countries will charge them if they win and
will be compensated by them if they lose.
The last calculations show that a worldwide investment of $12 trillion
was made to save the financial system. As part of the emergency plan,
the U.S. Federal Reserve alone distributed more than $9 trillion in
short-term securities, which accounts for more than the entire American
economy. Citigroup received $1.8 trillion, Merry Lynch $1.3 trillion,
Morgan Stanley $1.4 trillion and Bear Sterns $960 billion.
During the month of December, Wall Street will distribute $179 billion
in bonuses and prizes. The Federal Reserve, which is printing $600
billion to defend its economic manoeuvring, declared that it would
create almost 700.000 new jobs. According to this logic, if creating a
job costs about $1 million, which financial institution will provide the
capital to eliminate unemployment?
The logic of capitalism considers the very idea of eliminating the risks
of a market system as a dramatic mistake. This has always been the
argument used against leftist economic thought. But now, these policies
are not being carried out by the left, but by whole political
establishments. The fiscal deficit has priority over the social deficit,
which should normally be the first political concern.
The number of jobless is rising, and some theorize a new economy where
unemployment becomes the norm. Since the fall of the Berlin Wall, we are
unarguably witnessing an increase in wealth that is being distributed
extremely disproportionately, concentrated in the hands of the richest
2% of the world's population.
This process does not know ideological or political differences. Last
year, China received 37 times more private investment than Brazil.
Today, China has 89 billionaires, against India's 20.Two decades ago,
neither of these countries even had billionaires. Are we facing a new
legitimization of the financial system or the incapacity of the
We arrive to the third topic: reversed globalization. It's not a mystery
that economic globalization was set up by the north to continue their
gains through finance and trade.
Henry Kissinger designed globalization to be the new stage of U.S.
supremacy. Washington took the steering wheel of globalization from the
UN system, which was restricted to the areas of assisting development,
providing humanitarian aid, and supplying social and technical services
such as health and education -- all things that do not turn a profit.
Trade is not part of the UN as it belongs to the World Trade
Organization (WTO). Finance simply does not have governance organs and
it goes where grow this without any ideological consideration.
The globalization of transport has made markets accessible to the South,
something unthinkable in the past. WTO director Pascal Lamy observes
that sending a container 100 Km, from Marseille to Avignon, costs the
same as sending it from Bangkok to Marseille, a 9,400 Km transfer from
the other side of the world.
Lamy also points out that talking about a product in terms of nation is
consistently more improbable. Telephones, TVs, cars, are almost always
assemblies of several factories all over the world with different trade
licenses and non-local technologies. The European Union discovered this
when trying to block China's imports, concluding that the majority of
their products were in fact products of relocated European companies.
It is not a coincidence that we hear more about these new "emergent
economies", recently admitted into the G20, whose weight matters
for international processes. They are not only China, India and Brazil,
but also Indonesia and South Africa.
In the 15th century, countries in the North represented 20% of the
world's gross product (WGP), against 80% of what were later called
underdeveloped countries, China alone holding about half of this figure.
During colonialism the North's share jumped to 30% of the WGP in 1820,
and 60% in 1913 with imperialism. Since 1950, it decreased to 40% while
countries in the South grew to 60% of the WGP.
In other words, without access to cheap primary sources and privileged
trade agreements with the South, inhabited by more than 5 billon people,
can the one billon inhabitants of the North maintain their lifestyle and
their privileged use of the planet?
Aren't we entering a new era of reversed globalization that will end the
privileges of the North? It is time to ask this question.
| Analysis That Matters]
Savio is founder and president emeritus of the Inter Press Service
(IPS) news agency and publisher of Other News [http://other-news.info]
in which this Viewpoint first appeared.