>X-Sender: [EMAIL PROTECTED] >Mime-Version: 1.0 >Date: Wed, 16 Feb 2000 13:10:18 -0500 >To: [EMAIL PROTECTED] >From: Tim Rourke <[EMAIL PROTECTED]> >Subject: A WORLD IN ECONOMIC CRISIS*D >X-MIME-Autoconverted: from quoted-printable to 8bit by >dijkstra.uwaterloo.ca id NAA17326 >Sender: [EMAIL PROTECTED] >Precedence: bulk > >http://www.transnational.org > > >A WORLD IN ECONOMIC CRISIS* > >By Johan Galtung, dr hc mult, Professor of Peace Studies >American Ritsumeikan Troms" Witten/Herdecke Universities >Director, TRANSCEND: A Peace and Development Network >----------------------------------- > > >6. Conclusion and summary. > > The reader is invited to look at the effort to summarize >the argument in the chart on the next page, adding some more >context variables to this basically economic analysis. The flow >of the chart is from left to right, with the underlying and the >independent variables to the left, the intervening variable in >the middle, and the dependent variables to the right. > > The ruling economic system in the world today is the system >of the ruling region, the West, and carries, of course, the >signature of the deep culture of that region, its cosmology, >referred to as Occident I; the Occident in its expansion >mode./32/ > > One basic aspect of that cosmology is the conceptualization >of Time; equipped not only with the Idea of Progress, but with >Beginning and End, Paradise, the Fall, the Darkness, the Light, >and after the Progress the Crisis with the two possibilities: >Catharsis or Apocalypsis. The two great prophets, Adam Smith >and Karl Marx, both flashed the Light (blue light, and then red, >but Light) after the Darkness of feudalism/mercantilism, and of >capitalism, or of the entire past for that matter (equipped with >the paradises of village markets and primitive communism, and >the fall when humankind strayed away), promising the catharsis >of capitalism and socialism/capitalism, equipping both with >crisis. Smith psychologized, talking about the idiotizing effect >of routine work;Marx politicized, equipping capitalism with more >crisis than Smith, but then talked about counter-revolutions. >Basically, however, they both promised Catharsis in the End. > > But the Occident is no stranger to Crisis. The Occident >loves Crisis, feeds on Crisis. There is a whole pornography of >crisis, highly exciting, on display in the media at all times. > > The mainstream ideology of economism guarantees crisis and >will deliver provided the following four axioms are >followed:/33/ > >A1: there is no floor for economic activity, no "basic needs" > >A2: there is no ceiling for economic growth, no upper limit > >A3: there is the market steered by cost-benefit self-interest > >A4: the sum of one zillion egoisms is altruism (Invisible Hand) > >That the crisis guaranteed will be delivered also follows from >one simple consideration: in a finite world any infinite move in >the same direction will run against some wall, ie., into crisis. >Either the move stops, or undergoes some curvature (Einstein). > > On the margin are alternative cosmologies within or outside >the Occident, like buddhism, substituting stability for progress >and economically subsistence for growth. They are considered >highly subversive by mainstream Occident, even feeble-minded. > > As growth continues the domain expands from the Center, >through such mechanisms as globalization, privatization (so that >the growth is not impeded by State concerns), and increased >productivity (technology). And the scope deepens with an >incredible variety of products and financial objects. > > The net result in the first run is increasing inequality at >the global level, right now growing at an unparalleled speed. >Assets are channeled away from labor-sellers to capital-holders, >the global upper classes indulge in luxuries, some investment >and much speculation; the middle classes in normal consumption >(and quite a lot of it); the global lower classes live in >pandemic poverty and misery, possibly hearing voices about its >eradication when dying, like plague and cholera patients before >the advent of modern medicine. Snake oil is distributed by the >IMF, as also to the patients of the pandemics of earlier ages. > > The interface between rapid accumulation of financial >instruments and sluggish growth of the productive economy >because of underdemand or oversupply (depending on the viewing >angle) spells crisis. The crisis then hits the global upper >classes as lack of confidence in their own instruments, with >accumulation of massive debt and bankruptcies at the national, >corporate, and private levels. And it hits the global lower >classes with blunt misery and its concomitants: massive violence >(like crime in order to redistribute wealth) and massive >migration, like one billion on the march by, say, the 2030s./34/ > > In the midst stands the IMF, extending more credit (debt) >in return for "conditionalities" that add up to more economic >freedom for the global upper classes, and more misery for the >lower classes. A figure soon to fall, tragic in its absurdity. > > On the chart margins are some extra-economic contexts. > > First, it is inconceivable that two centuries of unbridled >smithism, with its four axioms, in the very center of the West, >geographically (Anglo-Saxon) and socially (the corporations), >should not have a basic impact on the two constituents of social >reality, culture and structure. If people are told that society >is at its best when everybody behaves in his/her own interest >they may end up not only doing so but even believing it. > > The result is anomie, a condition feared by sociologists: >the absence of compelling norms beyond sheer egoism. Solidarity >and altruism are considered anachronisms, the social steering is >increasingly by the pain/pleasure principle. One expression is >massive corruption, another is massive sect-formation in search >of new guidance. Nations can easily become such sects, hence >the particularly vicious character of nationalism these days. > > Second, when the individual constitutes him/herself as the >atom of social reality and the society as a noble/inert gas with >no molecules, then the social fabric (el tejido social, le tissu >social) will suffer, disrupt, fragment. I refer to that state >of atomization as atomie/35/. Combined with anomie we get a >society of egoistic leibnizian monads, uncoordinated by any >divine plan except its latterday substitute: the "discipline of >the market". The result is violence, why not eliminate people in >the way, and sect-formation, to provide new social fabric; and >then its mega-reflections, massive violence and migration. The >latter comes more easily when the fabric has unraveled anyway. > > The cycles introduced by Khaldun and Sarkar are useful in >this connection, among other reasons precisely because they >offer cyclical perspectives instead of Western linearity ending >with the apocalyptic crash (against the wall of finiteness) or >the catharsis of Endzustand, j'y suis, j'y reste. > > Sarkar combines in his thinking the concern with the >vertical social dialectic between high and low, the exploited >and/or repressed, and the horizontal dialectic between the three >key elites: the military, the intellectuals and the merchants >(kshatriyah, brahmin, vaishya). A key question is, who suffers >so much as to be the next in line when any one of them is in >power? According to Sarkar the military will be followed by the >intellectuals (who have to be sustained by the state), and the >intellectuals by the merchants. The net result is a circulation >of elites, on top of people. > > That the military are intellectually uncouth, and that >intellectuals struggle for freedom of expression (especially for >themselves) is easily understood. > > That the intellectuals supported by the state come up with >all kinds of state-led economies to please the hand that feeds >them, at the expense of the free initiative of the private >sector, is also easily seen. > And, that the merchants are so exploitative in their search >for market share and profit that the masses finally protest, >with major upheavals, also rings true. > > Sarkar's point is that at that the merchants now run to the >military, usually also with the support of the intellectuals, >demanding that they do "something". That brutish "something" is >then done, and later on the military will usually be blamed as >the sole responsible. They may find it unjust. > > We are now living in the age of the merchant. Like at the >beginning of the French revolution democracy and human rights >(but civil-political more than social-economic rights) are in >their interest. The synchronization of this age around the >world, in widely disparate societies, has much to do with the >collapse of dictatorial state planning (by intellectuals) in the >socialist countries at the end of the Cold War, but also >testifies to the general level of globalization of the planet >(with the obvious thesis that the dialectic is artificially >imposed on many societies). Of course, some intellectuals have >survived the transition: those at the service of the merchants, >glorifying their endeavors, helping them obtain their goals: >the mainstream economists and the specialists of business >administration; and, of course, the kinds of intellectuals >needed for the production and distribution processes. Pure >intellectuals are out, except for decorative purposes. > > During the age of the merchant globalizing, privatizing >economies look as normal and natural as building alliances, >preparing for a major nuclear holocaust and military rule >(possibly with some politicos up front) during Cold or Hot Wars. >That age of the military was also globalizing, being based to a >large extent on coordinated military logistic capacity in >alliances and counter-alliances. The age of the intellectual >was a short, but important aspect of the last part of the Cold >War, and its short aftermath. Then came the merchants. And just >as the ultima ratio, the final argument, of the military is the >gun, and of the intellectual the word, the final argument of the >merchant is money. To argue with the gun is also known as >violence, war, massacre; to argue with the money as corruption. >To argue through words is a two-way dialogue, as opposed to the >one-way order of the military and the one-way advertising of the >merchant. Democracy is more easily accommodated during the age >of the intellectual; and global markets during the age of the >merchant. They combine in buying political to fund politicians. > > A basic point in Sarkar's theory is that no age is forever >They are all one-sided exaggerations, playing on one or a few >human faculties instead of on the full panoply of human energies >and inclinations. This also applies to the age of the merchant, >which probably will be surprisingly short-lived. There will be >political uprisings and individual migration all over, among >other reasons because of the failure of the market system to >distribute the fruits of the endeavors. Except, that is, under >the assumption of a more balanced system capable of steering >both the vertical and the horizontal dialectics toward some kind >of harmony. The dream of good politics! > > Khaldun adds to this another cycle with four phases: the >New replaces the Old; the New gets settled and flourishes; the >next generation lives off the fruits; and the generation after >that squanders what was once so shiny, incapable of renewal./36/ >Time has come for the new New, the Bedouins breaking the gates. > > This reads like the story of the October revolution and the >Soviet rise, decline and fall; about four generations. No doubt >Yeltsin looked to many as that new New, capable of renewal and >a rapid transition to catharsis. In a very dualist/37/ culture >Gorbachev sounded like a messenger from the past. A deeper story >would be that the Yeltsinites went straight to Khaldun IV, the >era of corruption. And a still better perspective might be that >they were just the last part of the Khaldun IV of the Soviet >system, with anomie and atomie and their concomitants--massive >corruption, violence and sect formation--rampant. > > Where are we now, given that globalization synchronizes the >national dynamics, at least at the top level? Something was >ushered in, and not only in the ex-Soviet/socialist countries: >hyper-capitalism. No doubt brilliant, shiny in its visible >manifestations, such as the buildings of banks (remembering that >"bank" is the first syllable in "bankruptcy"). There is also >much gold behind what glitters. But it looks as if the system >is equipped with an accelerator pushing us through Khaldunian >phases at a speed defying "generation". The name of that >accelerator: the computer, with real time internet global co- >existence. The name of the economic manifestation: speculation. > > Prognosis: It will get worse: mass violence and migration. > > Therapy: Reverse all the above. But how? Building Zones of >subsistence? Themes for the next papers, or chapters. >----------------------------------- > >NOTES > >* The author would like to acknowledge the valuable comments by >participants in seminars where this paper has been presented, >particularly at Ritsumeikan University 4 November 1998 and at >Universit“t Witten/Herdecke 9 December 1998; particularly >Akifumi Fujita. I am also as always very grateful for comments >by Dietrich Fischer, and for comments by Ash Amin. The paper was >written when the author was Fellow at the Swedish College for >Advanced Studies in the Social Sciences, Uppsala, Spring 1999. >----------------------------------- > > >32. For an elaboration, see Johan Galtung, Peace By Peaceful >Means, London/Thousand Oaks/New Delhi: SAGE, 1996, Part IV, >"Civilization Theory". > >33. Jim Duffy, "A Fundamentally Flawed Economic Script" >summarizes the economic script in three similar axioms >([EMAIL PROTECTED]): >[1] Human needs are nonexistent. >[2] Human wants are infinite and insatiable. >[3] The essence of human motivation is self-interest. > >34. One of the very few saying the obvious is Dieter Brauer, >the editor of Development & Cooperation (No. 5/1998, p. 3): "It >is he poor who are footing the bill. In Indonesia, the current >daily minimum wage is 4,400 rupiah or about 30 US cents. >Reports say that even this low wage is not always paid by >employees.--The poor who had no hand in the making of the crisis >should not be the only ones to suffer". Pious wish. Chances >are they will be met by water-cannons, tear gas and bullets, not >a decent economic system. > Manuell Castells (UNRISD News, No. 19, Autumn/Winter 1998), >in "Informational Capitalism and Social Exclusion", quotes the >expanding 20/20 ratio and the fact that "extreme poverty, or >misery - usually defined as the proportion of people who are >below 50 percent of the poverty line - is the lot of the fastest >growing segment of the poor population in almost every country. >And as a significant number of people are being excluded from >access to regular jobs, they are moving into the shop floor of >crime. --It is urgently necessary to reverse the downward spiral >of exclusion and to use information and communication >technologies to empower humankind". Agree. The system, however, >will use exactly those technologies to control humankind. > As a third example take John Naisbitt's Megatrends, Warner >Books 1984, the chapter "From a National Economy to a World >Economy", pp. 53-79. Not one single word about the impending >crisis, already highly visible at the time of publication (the >USA crisis, the Mexican crisis in 1982, for instance). The >conclusion is n terms of increasing global interdependence with >no single word lost on the plight of the poor but with a >warning: To understand the U.S. economy today we have to look at >the economic health of each of the states and each of the >business sectors" (p. 73). True, macro-economics has its >limitations. But where are people? Had he given some attention >to that he would never conclude with the naive "World Peace >Through World Trade: Instead of resisting economic >interdependence, we should be embracing it wholeheartedly. In my >view it is our great hope for peace". Unfortunately, people not >only states also enter in the equation. The current system is >a massive war on common people. > >35. See Johan Galtung, "On the Social Costs of Modernization. >Social Disintegration, Atomie/Anomie and Social Development", >Development and Change, April 1996, Vol. 27, No. 2, pp. 397-413. > >36. The Japanese politician Shintaro Ishihara, in his book The >Economic War Declaration, sees the "Asian Crisis" more as a very >deliberate strategy by the USA to destroy sufficient economic >capacity in Asia, including Japan, for the USA to take over >collapsed companies. The now classical case would be the take- >over of the brokerage firm Yamaichi by Merrill Lynch, partly >brought about when the rating agencies Standard&Poor and Moody >lowered the rating for Yamaichi. My point is, however, that >such things will happen even when not intended, and will also >hit the USA, as it did in the 1970s and 1980s when Chrysler >needed a major government bailout, New York went bankrupt, the >Savings and Loans system collapsed and had to be bailed out by >the tax-payers, property prices were falling all over and on top >of that there was a stock market crash 15 October 1987. > Is this a case of Japan unable to renew itself, easily >taken over by innovative Americans and Bedouins? Or, is the >problem that the Americans deep down know the shortcoming of >their own economy and substitute aggression for innovation? >After all, there is a handwriting on the wall, uncomfortably >similar: > Contemplate the following headlines (from the archives of >the Japan Times (& Mail, October 27 1929; deadline Washington, >October 24 1929): "Hoover Assures American Trade is on a Sound >Basis" - "Bottom is knocked off the New York Stock Exchange" - >"All Prices Drop" - "President Declares Reports Show Employment >Situation is Good". Thus, whenever there is s drop on the stock >market the US media come out with similar statements, and with >interviews with people in the street, ten out of ten declaring >that they have faith in the economy. The doctrine of the self- >fulfilling prophecy (Thomas-Znaniecki) has some, but not >unlimited validity. Of course, nobody will sustain the thesis >that there will be an exact replay of October 1929. Thus, my >thesis is that the crisis is already there and that much >selective blindness is needed not to see it. > >37. The price paid for seeing the world in terms of only two >possibilities, "either communism or capitalism" and "communism >does not work", was very high indeed: > Michel Chossudovsky, "Global Poverty in the Late 20th >Century", ([EMAIL PROTECTED]) offers the following >comparison between Nazi-Germany's attack on the Soviet Union >during the Second world war and the workings of capitalism: >"following the German occupation of Byelorussia and parts of the >Ukraine in 1941, and the extensive bombing of Soviet industrial >infrastructure the Soviet GDP had by 1942 declined by 22 percent >in relation to pre-war levels. In contrast, industrial output >in the former Soviet Union plummeted by 48.8 percent and GDP by >44.0 percent between 1989 and 1995 according to official data, >and output continues to fall". Of course, the mechanical impact >of sustained bombing hits the material aspects of the economy; >jungle capitalism hits its inner workings. > A morbid consequence of the economic catastrophe in >Ukraina, as in ex-Soviet Union in general: "elderly people in >eastern Ukraine who have not received pension payments for five >months have been offered free coffins as an alternative" >
